Nonprofit Finance Fund (NFF) has been awarded a $40 million New Markets Tax Credit allocation (NMTC) to support community development projects in low-income areas throughout the U.S. NFF will use its allocation to provide financing to help small and mid-sized nonprofit organizations better serve their communities.
“Though some have declared the recession over, the nonprofit organizations we work with—particularly those providing front-line services to needy Americans—are increasingly forced to put off needed infrastructure and operations investments to cover the gap left by government cutbacks,” said Antony Bugg-Levine, CEO of Nonprofit Finance Fund. “Our NMTC allocation will attract investors to promising facilities projects in struggling communities and ensure that high-performing organizations can continue to serve as beacons of justice and equity.”
The New Markets Tax Credit program provides significant incentives for investments in traditionally hard-to-finance projects. Over a period of seven years, the program rewards investors with tax credits totaling 39 percent of the total financing for select projects in qualified communities. NFF has created an NMTC product that provides attractive, flexible loan terms and an equity-equivalent feature that gives nonprofits the ability to affordably complete facility improvements.
NFF will work primarily on projects in low-income urban areas that will expand and improve services for community members and generate jobs. It will also seek to finance projects that create environmentally sustainable outcomes. In one such project funded by a past NMTC allocation, Community Health and Social Services Center (CHASS), a healthcare center in southwest Detroit, found that demand had overburdened its facilities. A 2003 plan for a larger facility finally will be realized in 2012, when CHASS moves into their new building, more than tripling their space to 48,000 square feet.
“Nonprofit Finance Fund’s New Markets Tax Credit allocation made it possible for CHASS to develop an expanded healthcare facility in southwest Detroit, when other financing options were simply unavailable to us,” said Ricardo Guzman, CEO of CHASS. “We are grateful for the opportunity to continue providing critical services in safe, clean and modern facilities to patients who have few other choices.”
The Department of Treasury has awarded $3.6 billion to 70 organizations nationwide under the 2011 New Markets Tax Credit program. NFF was selected from an unprecedented pool of 314 applicants who applied for more than $26.7 billion in NMTCs. NFF has been awarded nearly $200 Million in New Markets Tax Credit allocations over the past five years to help broker high-impact investments that strengthen nonprofit organizations.
About Nonprofit Finance Fund (www.nonprofitfinancefund.org)
Nonprofit Finance Fund (NFF) is a national leader in nonprofit, philanthropic and social enterprise finance. Founded in 1980, NFF provides loan financing, access to capital and direct advisory services that build the capacity and the financial health of nonprofits. A leading community development financial institution with over $80 million in assets, NFF has provided over $235 million in loans and access to additional financing via grants, tax credits and capital in support of over $1 billion in projects for thousands of nonprofit clients nationwide. NFF has a staff of more than 70 serving nonprofits nationally from offices in Philadelphia, New York City, Newark, New Jersey, Boston, Detroit, San Francisco, and Los Angeles.