2011 Portfolio Performance Report is now available here!

In the for-profit sector, a company periodically requires an injection of equity capital to fuel its growth and pay for the deficits incurred en route to sustainability – the point at which revenue reliably covers operating expenses. While the accounting concept of equity does not exist for nonprofits (because we don't have owners), mission-focused organizations nonetheless share the episodic need for investment. NFF Capital Partners focuses on helping nonprofits attract this equity-like financing to fund growth, achieve financial sustainability, and increase social impact.

Through Capital Partners, NFF is changing the way nonprofits and donors think about growth and fundraising. Our goal is to close the nonprofit "equity" gap forever by creating a generally accepted distinction between builders, those of us who invest towards creating high-performing nonprofit enterprises and buyers, those of us who put their money directly towards effective program execution.

BUILDING IS NOT BUYING*

For-profit accounting makes a clear distinction between money from investors (who build the company) and customers (who use the company). Nonprofit accounting does not make this distinction – donations meant to build sustainable capacity are lumped together with those meant to pay for program execution. As a result, no one can answer the question: How much growth capital did it take to build this nonprofit? Nor can we answer the question: What percent of this organization's costs are covered by its sustainable business model?

NFF Capital Partners Build/Buy* methodology makes a clear distinction between the builder and buyer roles and allows nonprofits to strategically target growth capital campaigns to multiple builders, who can then leverage each other by pooling their resources into a single, strategically-aligned investment of growth capital.

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GROWTH CAPITAL SERVICES

Acting as a benevolent broker, NFF Capital Partners helps to facilitate growth capital campaigns of $5 million or greater, so that management teams can focus on perfecting the high quality programs combined with the revenue-generation capabilities that ultimately will sustain them.

Through our Sustainable Enhancement Grant (SEGUE) methodology, NFF works with nonprofits to develop a prospectus document, like those used to attract private equity investments in the for-profit sector, that articulates their enterprise-level plans for enduring social impact. We also collaborate with our clients to adopt an accounting methodology that distinguishes growth capital from the revenue of everyday donations. Since the SEGUE prospectus and accounting treatment clearly show investors that their money will be used for specific social impact enhancement and sustainability initiatives, they are powerful tools to help nonprofits strategically raise significant growth capital.

The SEGUE process is ideal for established organizations that have experience with capital campaigns and have sustainable growth plans calling for $5 to $30 million of investment. For more information please contact NFF Capital Partners at 415.255.4849 x12 or nffcapitalpartners@nffusa.org.

*For more information, see George Overholser's seminal piece "Building is not Buying."