Greetings!
I am pleased to share with you that Contact Fund is working
with Nonprofit Finance Fund (NFF), a leading community development financial
institution in New York City, to provide flexible capital to New York City's
frontline poverty alleviation and economic development organizations.
The current economic
crisis has hit New York City not-for-profits and community development
organizations particularly hard, many of which serve the City's most vulnerable
neighborhoods. Significant cuts in city and state contracts, reduced charitable
giving and slow reimbursements have increased the need for new sources of capital. At the same
time, access to capital from traditional commercial lenders and community
development finance institutions remains limited.
After some deliberation,
Contact Fund has determined that it's next round of notes, to be issued on
March 15th, will be designated to help with the current crisis and
most effectively put our capital to work in New York City.
Contact Fund has a strong history with Nonprofit Finance
Fund including co-investing on a green affordable housing development in the
South Bronx with Women's Housing and Economic Development Corporation (WHEDCO).
Our association with NFF is part of our growth plan which seeks to leverage the
resources of established intermediaries.
In recent conversations with NFF, we discovered several
opportunities for Contact Fund to co-invest in its existing pipeline projects
which may not otherwise get funded. NFF
is conducting their due-diligence on several projects, but still need a
layer of capital to make them work. Contact Fund will provide a layer of
subordinated capital in order to make these deals more feasible for NFF to
fund. Although Contact Fund will assume more risk, we believe it is an important decision to free up much needed capital for these organizations.
Below are a few examples of projects that Contact Fund and
Nonprofit Finance Fund are currently reviewing.
Contact Fund will be raising up to $500,000 to potentially deploy to one of these projects. Due to the preliminary stage of these conversations, we can only provide
limited details on each deal and organization.
Deal 1:
A $14mm community facility in Queens requires $8mm in
construction lending. The project has potentially
secured a construction lender for $5mm, and is in need of an additional $3mm. The project is in preliminary stage of review by NFF and may close end
of the 2nd or perhaps 3rd quarter of 2010.
Deal 2:
A major social service agency in Manhattan is in need of $1.5mm-$2mm
to make critical leasehold improvements on their service space. This project is in the
preliminary stages of review with NFF and may close in the middle of 2nd
quarter.
Contact Fund's community investing approach to provide
strategic, flexible sources of capital to high-performing local New York City
based organizations is made possible because of its expanding base of private noteholders. Our next round of notes will be issued on
March 15th, and we are actively raising capital to deploy to one of the
aforementioned projects under consideration.
We invite you to contact us with any questions about these
deals, or to obtain information about how to invest in this next round of Contact Fund financing. Please call 212-209-3877 or e-mail us at [email protected] to receive a copy
of our latest Private Placement Memorandum and Subscription Agreement.
Mark Reed
Founder, Contact Fund
P.S. In collaboration with Nonprofit Finance Fund, we are in
the process of putting together more detailed information about the current community
development landscape in New York City. We look forward to having that
information available to you in the next couple of weeks. |
