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FCI helps nonprofits with low-interest loansBy James Edward Mills
Forward Community Investments, formerly known as the Dane Fund, helps aid organizations acquire low-interest loans that bridge the gap between their immediate need for capital and the cash flow of their fundraising initiatives. "What we do is lend money at below-market rates to nonprofits," said Salli Martyniak, president of FCI. "We started off just in Dane County and did that for 11 years. But we realized that we needed to extend throughout the rest of the state." Hence the name change. Now FCI offers financial assistance to charities across Wisconsin. Many of its clients are organizations and individuals that might have difficulty or have trouble affording working with a bank on their own. Bruce Moffat, executive director of the Wisconsin Community Fund, said FCI provided the expertise his group needed to construct its Madison headquarters, called the Social Justice Center, at 1202 Williamson St. "We had really never done a real estate transaction before," Moffat said. The WCF vests most of its resources in funding grassroots organizations who work to solve problems in their communities and fight for the rights of disenfranchised citizens. FCI loaned their expertise in navigating the loan process. "Over several months there was a lot of advice provided," Moffat said. "The project was finally approved for a loan of $120,000. That enabled the project to be viable to M&I Bank who was ultimately the lender of the mortgage." Since the Dane Fund, now FCI, began in 1995, Martyniak said no nonprofit has ever defaulted on a loan. "And that's pretty remarkable," she said. "We do get a few delinquencies here and there but no defaults." Martyniak takes special care to assure the groups she works with have the resources to raise the funds they'll need to meet their loan obligations. Defaults are unlikely by design. When it comes to dollars and cents she said a nonprofit is just like any organization that manages money. "Really non-profits are no different than small businesses," she said. "They have financing needs just like small businesses do but for different reasons." A nonprofit might have plans to renovate or build an operations facility like the Social Justice Center. A loan can cover expenses immediately while donors continue their contributions over several months or even years. "Contractors really want to have their money on time instead of waiting over a five-year period," Martyniak said. Many FCI loans go to support renovations and real estate transactions rather than the day-to-day operations of nonprofits. Becky Steinhoff, executive director of the Atwood Community Center, said FCI assistance was crucial in securing the capital needed to refurbish the Theo Kupfer Found-ry and Ironworks building, 149 Waubesa St. The renovated structure is scheduled to open in 2008 and it will serve as her organization's new headquarters. Steinhoff said FCI and Martyniak in particular helped Atwood prepare a very attractive investment package that was tapped for funding by U.S. Bank in St. Louis. "We had great legal and accounting advice, but Salli was the one who really brought the project to them and really nurtured that relationship so that they made the investment," Steinhoff said. "U.S. Bank had $100 million to invest in 26 states. And every state wanted all the money so it was a big deal for a small nonprofit in Wisconsin to get an allocation." The federal Community Reinvestment Act, enacted by Congress in 1977, encourages banks to help meet the credit needs of nonprofits in their communities. Lynn Mayer, vice president and CRA officer at Guarantee Bank, based in Milwaukee, said FCI helps her provide loans to qualified borrowers who are likely to do the most good. Since 2001, Guarantee Bank has provided more than $1 million in low-interest loans to non-profits. "We can be assured that working with Salli and her group that the funds will be used appropriately," Mayer said. "Our ongoing relationship working with them is a true partnership. They provide a service that as a financial institution we would not have the capacity to do. And that's a good match." James Edward Mills is a State Journal reporter. jmills@madison.com madison.com ©2009 Capital Newspapers. All rights reserved. |
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