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Dear Friends,

Over the past few years, our country has continued to wrestle with the impact of an economic volatility that appears to have no end in sight. For many nonprofits, this volatility has created a double-edged sword of funding declines paired with a need for services that just keeps climbing. Yet despite all the challenges, there are many successes and accomplishments that remind us all why we do what we do. Below are just a few of ours from 2010:

Providing Access to Capital

• Leading for the Future (LFF) Initiative. Through LFF, NFF has been working with ten outstanding performing arts nonprofits to help them transform their business models in a shifting economic, technological, and artistic environment, with the key goal of achieving reliable revenue after a 5-6 year period. Funded by the Doris Duke Charitable Foundation (DDCF), NFF is providing each organization with management consulting and peer learning, in combination with up to $1 million in flexible Change Capital specifically intended to help the organization implement substantive growth or change. Nearly 3 years into this Initiative, the LFF projects are beginning to provide instructive models for how to effectively invest this Change Capital.
• Catalyst Fund. Partnering with the Boston Foundation, Boston LISC, The Hyams Foundation, and United Way of Massachusetts Bay and Merrimack Valley, NFF created a unique 5-year fund to support technical assistance to nonprofits seeking to collaborate in order to preserve, expand, or improve services to the Boston community. The Fund serves as a source of financial and technical advisory support for promising voluntary collaborative ventures and mergers among nonprofits. Initially focused on supporting Boston area nonprofits, the Fund’s long-term goal is to develop as a resource for nonprofit collaborations nationwide, rooted in best practices and data. 
• Capital and Capacity for Economic Recovery Program (CCER). CCER, created with stimulus funding from the U.S. Department of Health and Human Services’ Strengthening Communities Fund, was developed to improve the financial health and business acumen of Philadelphia-area nonprofits that are actively engaged in economic recovery efforts. In 2010, this program provided capital and technical assistance to 10 nonprofits in Southeastern Pennsylvania, with 12 more receiving support in 2011. 
• Highlights from our New Markets Tax Credits (NMTC) Program.  In 2010, NFF closed 3 NMTC transactions and received an additional allocation of $21 million for 2011. Cumulatively, we’ve deployed $96 million from our total allocation of $130 million, working to provide financing to service providers in the health and education sectors. Among the new NMTC relationships was Community Health and Social Services Center (CHASS), which closed at the beginning of 2011. Established in 1970 to address the need for healthcare in southwest Detroit, CHASS began planning for a larger facility in 2003 in response to significant rises in demand for services. Their vision finally will be realized in 2012 with a new building that will more than triple their space, increasing capacity and allowing them to treat more patients. The expansion project is expected to create a minimum of 200 skilled trade positions during construction and 52 permanent full time jobs in healthcare. The new Center will also transform an urban brownfield site, acting as a catalyst for continued economic development in a distressed community. 
• Lending to Michigan Nonprofits. NFF was awarded $1 million from Trinity Health in Novi, Michigan, to improve the access to capital for Michigannonprofits in low-wealth communities. NFF is using this investment to finance nonprofit community facilities projects in southeast Michigan, the home of seven of Trinity's 47 hospitals. 
• Working Capital Loan Fund. The Clark Foundation allocated $2 million from its endowment to NFF to establish a working capital loan fund for its grantees. The Foundation has partnered with NFF, through a program–related investment (PRI), to establish this new working capital loan fund. 

Proving Impact

• Philanthropic Equity Works. In 2010, NFF did a retrospective analysis of the work of its Capital Partners practice. Capital Partners works to help nonprofits manage ‘philanthropic equity’ campaigns. Philanthropic equity investments are typically significant, multi-year investments that a nonprofit uses on the path to sustainable and substantial growth or change. The impact-to-date of these campaigns, explored in Capital Partners’ “Portfolio Performance Report,” resoundingly makes the case for further investments: among the 9 nonprofits that have conducted comprehensive philanthropic equity campaigns, philanthropic equity has, on average, more than tripled program delivery and doubled business model revenue.
• Mid-Sized Presenting Organizations Initiative (MPO) A Success.  In January, NFF contracted WolfBrown to evaluate this four-year (2004-2009) program of grants, financial counseling, and education designed to help 17 arts organizations meet long-term goals, maintain financial health, and sustain or increase opportunities for artists According to the study, the Initiative was successful in achieving its objectives, particularly given the impact of the recession. 

Thinking and Sharing Ideas 

• New Blogs and Writings. NFF launched its first blog, Money & Mission, on The Chronicle of Philanthropy in the summer of 2010, posting 20 essays on issues related to nonprofit finance, funding, and innovation. This blog was followed by a second blog, Social Currency, on our own website at the beginning of 2011. 
• Ideas In the News.  NFF’s ideas on Philanthropic Equity, nonprofit trends, mergers & collaborations, and managing through the ongoing economic turmoil were highlighted in a variety of articles in 2010. Publications including The New York Times, The Chronicle of Philanthropy, Fast Company, NonProfit Times, Philanthropy Journal, Forbes.com, Social Velocity Blog, and Philadelphia Business Journal featured NFF’s work or ideas over the course of the year 
• Web Chats. NFF hosted 3 webchats on Growing Impact, in partnership with The Chronicle of Philanthropy. Combined, more than 7,500 people participated in the chats in 2010. 
• Annual Nonprofit Survey. Every year, NFF’s nationwide nonprofit survey yields data on financial issues facing our sector. Our findings indicated that the recession continues to impact the sector. Particularly for organizations providing critical services, it’s getting harder and harder to keep up with rising demand. 

In 2011, our work continues in full force. With support from The Rockefeller Foundation, NFF launched a new Social Impact Bond Learning Hub (nffsib.org or payforsuccess.org) to aggregate and share resources on Social Impact Bonds and impact investing. Through Grantmakers for Effective Organizations’ (GEO) ‘Scaling What Works’ Initiative, NFF is offering workshops nationwide to guide grantmakers in their financial analysis of grantees and discuss practices that can hinder nonprofit effectiveness. We also continue to place capital with diligence, cumulatively making over $250 million in loans and $30 million in re-grants, deploying $130 million in NMTC allocations, and leveraging a total of $1.4 billion since our inception.

These and many other successes come on the heels of some important organizational changes that lead NFF into a new era of leadership. As NFF wished farewell to its President, CEO, and founder, Clara Miller, we are happy to welcome our new CEO, Antony Bugg-Levine. Previously a Managing Director at the Rockefeller Foundation, Bugg- Levine conceived, developed and led the Foundation’s landmark initiative, ‘Harnessing the Power of Impact Investing.’ Bugg-Levine’s selection marks a key moment in NFF’s history as an institution that embraces both traditional and innovative approaches to financing social change.

As a mission-driven organization, NFF is fully committed to staying focused on supporting the nonprofit sector. Particularly now, we are keenly aware that nonprofits need partners to help them develop creative solutions to get and stay on the path to sustainability. And we’re deeply proud to be a part of the community of funders, supporters, and other intermediaries working together to make this happen.

Best,

Janet Thompson

 NFF Interim President & CEO