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Have Better Cash Flow!

As a grantmaker, it doesn’t take long to observe that cash flow management is a real challenge for many nonprofit organizations, particularly small and midsized ones. Executive directors and staff of smaller nonprofits are talented in many programmatic and operational aspects of running their organization but many lack the experience of financial management.

Without consistent cash flow forecasting and management, nonprofits -- just like businesses -- find themselves in a corner when anticipated revenue doesn’t materialize as expected.


For more than 60 years, The Community Foundation for Greater Atlanta has observed that nonprofits feel they have few finance options, for example, programs being funding by government contracts for services. Federal, state, and/or local government contractors have a recent history of late payments on these contracts for services. Worse, these government contracts are usually reimbursable, meaning the nonprofit must expend the funds first to do the programs then wait for delayed repayment. Nonprofits have few options because banks usually cannot “perfect” (collateralize) revenues from a government contract. Complicating matters, some banks will confess that lending to smaller nonprofits with budgets under $3 million is not a business priority.

The result? All too often, nonprofit leaders will do whatever they can to keep their programs running, including using their personal credit cards, delaying compensation from their modest salaries, putting off tax payments, and more, in an effort to navigate an organizational cash crisis and keep essential social services operational.

What is a solution? Like other businesses, small and mid-sized nonprofit organizations can benefit from bridge loans.

Witnessing these debilitating cycles, The Community Foundation for Greater Atlanta created the Nonprofit Bridge Loan Fund (“Loan Fund”). The Loan Fund supports small and midsized nonprofit organizations in the 23-county metro Atlanta region by providing short-term loan financing to cover timing delays in the receipt of funds from grants, government contracts or other highly predictable funding sources. Bridge loans of up to $50,000 bridge the gap in cash flow until a scheduled or expected payment arrives.

The Nonprofit Bridge Loan Fund has attracted national attention and has now been replicated in several regions in the U.S.

However, ongoing cash flow management remains a challenge for many nonprofits. In July 2015, The Community Foundation launched a new online service to help organizations take control of and improve their cash flow, which will be housed on a new Nonprofit Bridge Loan Fund website. This site will serve as an entry point for nonprofit leaders looking for helpful resources and tools to improve their business capacity around cash flow management. The goal is to help remove the perceived stigma and lack of knowledge about loans and give nonprofit leaders a clear and easy path for getting basic financial help, either by applying for a loan or accessing other tools.

Website features:

  • The Role of Debt (and bridge loans specifically): Nonprofits can find advice on how to approach a bank and prepare themselves to qualify for a loan; testimonials and case studies from former borrowers from the Loan Fund; ways to move ahead if declined by a lending institution; and how to apply for a loan from the Nonprofit Bridge Loan Fund.
  • Video Tutorials: The website hosts original instructional videos on how to forecast cash flow and use credit as a cash-stabilizing tool. The topics will grow over time and be broken into short chapters for easy accessibility and reference.
  • ‘Cash Flow Coach’: In partnership with GCN, the Nonprofit Bridge Loan Fund will offer grants for nonprofits to work with a financial consultant for four hours to get their arms around cash flow projections. The consultant reviews the organization’s current cash flow management procedures, makes recommendations and coach the organization through implementation. This program works in conjunction with The Community Foundation’s established management consulting grant program, the Nonprofit Toolbox.
  • Cash Flow Training and Resources: Working with partners throughout the community, including GCN, United Way, the Foundation Center, ACE Loans, and funding partners, the Loan Fund will offer a revolving list of training, resources and ways to understand and better manage cash flow!

Visit the Nonprofit Bridge Loan Fund at www.nonprofitbridgeloanfund.org. Sign up to receive our newsletter at www.cfgreateratlanta.org.

Lisa Cremin is the founding director of the Metropolitan Atlanta Arts Fund, and also focuses on the Foundation's innovative Nonprofit Bridge Loan Fund. 

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