The Ann Arbor Area Community Foundation (AAACF) is now offering short-term loans up to $50,000 each for local nonprofits that might be short on funds due to the COVID-19 pandemic.
The loans are meant to cover an agency's operations for up to 180 days at 0% interest. Nonprofits who apply must demonstrate the ability to pay the money back, which could be through future grants already committed or other revenue streams.
Neel Hajra, AAACF chief executive officer, says nonprofits will have at least a year to pay off the loans and AAACF will work with each agency on a specific payment plan.
Hajra says the loans will expand AAACF's reach to support more local nonprofits during this health crisis. The foundation has had a loan model in the works for years, and decided this was the best time to put it into action.
"If not during a crisis, then when?" Hajra says. "Citizens are experiencing extraordinary circumstances, and there are a lot of nonprofits involved in the lives throughout Washtenaw County. What are all the stops we can pull out to help?"
Hajra recognizes that loans are a different type of funding from what most nonprofits are used to, and anticipates there will be nonprofits who would be better supported through a grant.
"This is meant to alleviate stress for a nonprofit, not add stress of paying back a loan," Hajra says. "That's why we want to make sure the organization has the financials to accept this loan. We know this will be an adaptation and learning process as well."
For more Concentrate coverage of our community's response to the COVID-19 crisis, click here.
Emily Benda is a freelance writer based in Ann Arbor. You can contact her at emily@emilybenda.com.
Photo courtesy of Ann Arbor Area Community Foundation.
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