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Nonprofits and capital providers connect

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A recent convening of nonprofits and capital providers concluded that better information and mutual understanding could help shrink the gap in investment capital needed by the sector, a new report says.

While charities say they face challenges in finding the investment capital they need, groups providing such capital say those funds are indeed accessible.

A roundtable discussion organized by the Johns Hopkins Center for Civil Society Studies in February brought together representatives of both parties who shared ideas about bridging the investment-capital gap.

Many nonprofits find that accessing capital is both difficult and time-consuming, particularly when needed for activities like training and program development.

Some have found needed funds without traditional capital providers by creating joint ventures with for-profit groups or starting their own revenue-generating businesses, for example.

But investment capital groups say money is available for nonprofits in the form of below-market-rate loans and other vehicles.

Roundtable participants say additional education is needed for all parties.

They say nonprofits need a better understanding of capital and investing, capital providers need a better understanding of how nonprofits work, and foundations need to know more about nonprofits’ capital needs.

Foundations also should consider offering more non-grant support, including loans and loan guarantees, participants say.

They say governments so could assist by providing tax credits that would encourage capital providers to invest in charities.

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