April 19, 2014
Financial advice for organizations that help their communities

02/09/2013

When the International Franchise Association Foundation wanted to grow minority branches among its membership, the foundation set up a for-profit subsidiary.

First, it established a fund to which members contributed and hopefully the private sector would be enticed to, as well. Banks then would use the fund as a lending source. Money from the fund would be used to provide guarantees, or make loans for equipment, and so forth. Meanwhile investors also could see a return.

To do this, the foundation turned to Wall Street Without Walls for assistance. Managing partner John Nelson said that WSWW has been helping nonprofits in the community development field for more than 10 years, training them on "creating new sources of capital, from capital sources, endowments, banks and capital market streams."

WSWW, through its network of volunteer financial experts, can help an association create a financial plan to actualize their community development ideas, through training and consultation, Nelson said. WSWW has successfully helped capital markets finance innovative projects in Washington, Milwaukee, New York and New Hampshire. WSWW also worked with the Pine Ridge Indian Reservation, to launch the Native American Investment Group, which serves all the reservations.

Creating a for-profit subsidiary is but one way an association can fund a community development project. Nelson noted other ways that WSWW has helped associations, including forging collaborations or strategic mergers with other organizations on projects, especially as competition is tighter for government funding. Another alternative is socially responsible investment, where the nonprofit gets investors to fund a project that will help the community, such as a child center. (Contact Global Impact Investing Network for ideas your organization can use for social investment.)

Nelson will discuss more on how WSWW works with nonprofits at an executive briefing on "Creating New Revenue Opportunities for Not-for-Profits," noon-2 p.m. Feb. 26 at the City Club in Washington, sponsored by Xenith Bank. For reservations, contact Gayle Donaldson at gdonaldson@xenithbank.com.


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