Secret to success:

Fundraising. It’s a reality that all non-profit – and some for-profit – organizations must face. Maybe I shouldn’t have been surprised to have spent such a large chunk of this summer looking for funding. Searching for foundations, typing up solicitation letters, cultivating donors…the routine began to get old, especially when my thoughts turned to the slim chances of snagging a hefty sum.

Social enterprises, socially-minded businesses, or whatever we call these waves of innovation that the Starr Fellowship fosters – they might theoretically be able to turn a profit and self-sustain. It’s easy to think, or hope, that the burden of fundraising is left to unquestionably charitable organizations like UNICEF and the American Cancer Society.

The Capital Good Fund, for example, is different from these: it’s a microfinance institution. It’s the trendy new poverty alleviation tool that will eliminate the global need for charity. Right?

But when it comes down to it, CGF is still a non-profit organization. “Turning a profit” is not exactly a part of its mission statement. The fact that I’d end up fundraising this summer seems, in retrospect, quite obvious.

As I practiced my elevator pitch and drafted LOIs until CGF’s catch phrases became ingrained in my memory, I did some soul-searching. Why was I not spending my days out of the office, meeting CGFs borrowers, getting my proverbial hands dirty and feeling truly productive? I’m still figuring out the answer. One thing I’ve realized is that productivity rarely happens without money. People like the Starr fellows might be motivated by less monetary incentives, but we need others to get substantial things done. Or maybe we don’t, but working alone, progress would come only through intense, full-time labor – with no income, how would we survive? I’m realizing that every non-profit organization, even microfinance institutions, needs to actively seek donors. Though it seems disconnected from social missions, fundraising really does enable all the impact that we might have.

Is fundraising the root of all social work? To get to it, will I drop everything and aspire to become a professional grant-writer? I can’t quite see myself heading in that direction, but after this summer I certainly have a newfound admiration for those who do.

Julie Siwicki, Capital Good Fund

Risk vs. Reward

We’re approximately 3 repayment periods into our lending cycle and so far we’ve been fortunate to have a 100% repayment rate. CGF’s borrowers have been very professional in repaying on time, with some even depositing their payments directly into our account even before the due date. While the credit histories of many of our clients have been shaky, on-time repayments are one way that these borrowers have shown their “creditworthiness.” Our borrowers, all primarily moderate-income residents of Providence, have been very satisfied with the support they’ve received from CGF and the relationships they’ve developed with the staff.

All of this sounds great, and the stability CGF has been fortunate to have during its pilot phase is an important prerequisite to building a strong, effective lending organization. However, this stability raises an important question, one that many social sector organizations ask themselves from time to time as a sort of informal evaluation: Are we reaching the right people? CGF’s mission is to support low and moderate-income individuals in order to help these populations gain access to the American financial system. We’ve got the moderate-income part down, but what about the low-income group? Why haven’t we approached these individuals to the same extent? Here’s a better question: Why haven’t they approached us?

It’s not like we are gauging our social impact by the number of defaults we have, nor are we by any means seeking out defaults in order to feel more secure about reaching our target market. However, one of the reasons we haven’t had many defaults yet is because our clients have not been the most risky borrowers. Much of this is due to our own accord, and occurred without a conscious effort on our part. As a start-up organization, we viewed a smooth transition into the lending business as imperative to having a strong long-term impact on the community we serve. In order to achieve this smooth transition, we shied away from risk. We decided to “play it safe” for a while, and in doing so, avoided actively seeking out very low-income individuals as clients. While our current borrowers are far from what a traditional financial institution would consider safe, many of them are also not what microlending organizations would deem risky.

CGF’s mission is to create a poverty-free, inclusive green economy through innovative microfinance. In order to eradicate poverty, we must target it; in addition to moderate-income families, we must lend to those individuals that will see the most growth in standards of living as a result of a small capital infusion. CGF has already started to identify some of these lower-income borrowers, many of whom have aspirations to start their own businesses, through our community partners. Moreover, through researching the demand for credit-building loans, CGF has also come across a number of individuals in Providence who lack credit histories and thus would benefit tremendously from a loan that could help them build credit, something that would gain them access to even more financial services through credit card agencies or commercial banks. These potential borrowers will be even riskier investments then our current ones, but in turn could see huge changes in the standards of living of themselves and their families. Hedging against risk is critical to organizational growth, but not when the hedging mechanism compromises reward. As CGF gives out more loans, striking a balance between risk and reward will be critical to creating a truly upwardly-mobile, socially equitable economy.

A secret weapon?

CGF should invest in thank-you notes – a significant conclusion I’ve come to over the past month or so, working as the Capital Good Fund’s community partners coordinator. In each one-on-one meeting with partner organizations, I try to figure out where they want the partnership to go and how to ensure that CGF is giving back all the help we’ve gotten. I’ve found that a little “thank you” can go a long way in making people open, friendly, and willing to offer more resources and advice.

I realized this through a written evaluation form sent back by our partner at the Rhode Island Economic Development Corporation (RIEDC). She had referred one of our first clients to us, and suggested that we have a policy of formally thanking those who give us referrals. In response, I brought a short note to our meeting that she seemed to appreciate. (“I’ll put this right on my desk. Oh I’m going to cry!” Perhaps a mild exaggeration on her part, but I’ll take it!)

Of course, ideally we can accompany the words with something more substantial. Sometimes it works out so that by helping out our partners, CGF benefits too. For example, RIEDC asked us to write a borrower “success story” for the woman who they sent to us to post on their website. It will indicate that they make good connections for their clients, publicize the effective partnerships they have, and attract more community members to their services. CGF will be happy to collect information for and draft this story because a) we want to reciprocate RIEDC’s help, and b) we can use the same story for similar purposes.

Other times, we have to put in work to thank our partners that doesn’t have an immediate payback – which is fine. I’m definitely willing to make sacrifices to help make Providence’s nonprofit community more tight-knit. I’ve come across so many organizations that do the same things here that I wonder how much of the sector is redundant and wasting resources. Like SII, I hope that I can contribute a little to streamlining social efforts in this city. To make this impact I’m arming myself with active listening, sensitive doing, and a big handful of thank-you notes.

Julie

My best guess

Alright, my summer with CGF is about to begin. I met a week and a half ago with the rest of the summer crew about what exactly we have to do over the next 3 months – 31 items on the to-do list!

Here’s what I got out of this meeting.
1. I have to be friendly to community partners. CGF has gotten feedback in the past about not taking our partners’ needs into account as much as we should – so I have to fix all that. I definitely feel up to it, especially after a week of working at the reception desk for Alumni Weekend…Really!! I have confidence in my people skills. I also feel able to collect and implement feedback from those who I work with – I did a lot of it last summer, working with community health committees in Mali.

2. I have to come up with a format for (bi?)monthly community partner meetings. What will we talk about? Will borrowers attend? How much input will each party have? This has to be an organic process – so it’s hard for me to know how it will work out. I’m a little worried about my ability to institutionalize these meetings, but have a feeling that it will be less intimidating once the ball gets rolling.

3. I have to make decisions about CGF’s long term vision!! Granted, we’ll all be talking about it a lot this summer. The part of the vision that I’m especially concerned about is whether or not we want CGF’s student staff members to actively train and educate borrowers. Are we qualified enough? Where would community partners come in? I anticipate a lot of debate around this issue over the summer – I’ll try to implement any resolutions into the community partners structure.

Looking forward to reading over this blog entry at the end of the summer, comparing it to how my work actually plays out. My ideas seem accurate enough right now…

Till next time,
j

Support the Capital Good Fund at Blue State Coffee

Blue State (Collegehill Café), a local coffee shop in Providence, RI near Brown University’s campus recently named the Capital Good Fund as one of the local causes that it supports.  Every quarter, Blue State donates approximately 5% of its gross sales to a select number of local initiatives.

In other words, the more people that vote for the Capital Good Fund, the more money CGF will have to lend out to low income individuals in Providence!

This is a very exciting time for CGF, as this relationship with Blue State comes amidst our pilot phase and promises to help our organization build both financial and organizational capacity.  We will be posting updates on our partnership with Blue State as the quarter progresses!  Thank you all for supporting us, and if you live in the city of Providence, make sure to visit the Blue State Café located in the Brown University Bookstore at 244 Thayer St, Providence, RI 02912 to vote for CGF!

For more information on CGF, please visit www.capitalgoodfund.org or email info@capitalgoodfund.org

Careers in the Common Good-The World of Microfinance Presentation

The versatility of microfinance continues to make innovation in services for low income populations possible. This versatility makes it possible for a number of organizations to substantiate loan products with auxiliary financial services. In addition, innovation in the industry continues to give rise to new job opportunities, even at the entry level.

Feel free to review the presentation & handout from the Careers in the Common Good Community Hours presentation:  presentation &  handout

The Capital Good Fund, part II

By Julie Siwicki

 

The fundamental objective of changing my world has guided me through a past of coursework, jobs, and community service. These have given me strong leadership skills, a solid academic background, and hands-on experience, which I will apply as I build a coalition of community partners for the new microfinance initiative in Providence, CGF. My qualifications do not guarantee that I will avoid obstacles this summer; in fact, I will inevitably face challenges in my work. Entering this project I am aware of my strengths and weaknesses, and throughout it I expect to grow both professionally and personally.

 

I will bring to CGF a wealth of leadership experience, since I hold an executive role for three major groups on campus. Academically, I have a foundation in economics and development studies that will inform my work. I also have hands-on experience with microfinance and coalition-building projects (albeit those in Mali, West Africa). I have worked with inner-city education projects, too. Close relationships with students from poor, immigrant families have shown me the extent of urban troubles in the US. They have also exposed me to community members’ drive to confront the problems – one that I want to join by working with CGF.

 

Despite these assets, I will undoubtedly face challenges as CGF’s Community Partners Coordinator. Most tangibly, my responsibilities may require Spanish language skills that exceed my abilities. When necessary I will hire professional translators and turn to CGF’s bilingual partners. In addition, I expect some feelings of hesitation as a leader on unfamiliar terrain. I understand less about CGF than many of its other personnel, since I joined the initiative much later than they did. I will have to learn quickly about logistical aspects of CGF before I can act confidently as a leader. I will also have to adapt my knowledge of Malian microfinance to American structures. My frame of reference will have to shift to include larger loans and more bureaucratic procedures. Finally, I am not fully accustomed to realities of daily life in poor, urban America. My experience in this setting prepares me for what to expect, but does not guarantee that I will fit in or be immediately effective.

 

I am confident, however, that I possess the skills to rationally assess difficult situations. I will absorb advice offered by CGF’s leaders and partners who better understand them. I know that my strong foundations and my potential for growth qualify me to be CGF’s Community Partners Coordinator. I am thrilled for this opportunity to foster an effective coalition ensuring the Capital Good Fund’s long-term sustainability.