WILMINGTON – Basha Silverman, CEO of Jewish Family Services of Delaware (JFS), was worried for her nonprofit’s future after it didn’t make the cut for the first round of the U.S. Small Business Administration’s Paycheck Protection Program (PPP).
But as the second round rolled around, JFS and 76 other Delaware nonprofits had access to about $11.1 million through a separate path created by the National Development Council (NDC) and facilitated by Stepping Stone Community Federal Credit Union, Discover Bank, the Delaware Alliance of Nonprofit Advancement (DANA), and three local foundations.
JFS received a little more than $439,000 for payroll, rent, and utilities.
“This money is a lifeline,” Silverman said. “We’re so grateful to the thoughtful people that put together this space for us to compete, for the little guys that were missed. Without it, we would be facing a dangerous reality of contracting services.
NDC, a New York nonprofit that raises capital for investment in low-income communities, set up a $100 million fund to help. Because it has longstanding ties with Delaware foundations and nonprofits, it directed $10 million of that to Delaware nonprofits, with loan terms that mirrored the PPPs.
These loans have the same terms as others under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, with 75% percent designated to eight weeks of payroll, while the rest could be spent on rent, utilities, and interest on mortgages. But there was one big exception.
Discover Bank rallied the Longwood Foundation, Welfare Foundation, and the Jessie Ball duPont Fund to create a $220,000 grant to keep the fund’s interest rate at 1%.
Wilmington-based Stepping Stones Community Federal Credit Union agreed to supplement NDC’s commitment, processing an additional $1.4 million in loans.
NDC CEO and President Daniel Marsh relied on established partnerships after the money was raised, figuring out who needed the financial assistance the most. The SBA designed the PPP like “the Hunger Games for small businesses,” he said, turning it to a free-for-all.
“Delaware’s nonprofit community was completely locked out, and some of them may miss out because they don’t have the right backing connections to get the loans processed and approved,” Marsh said. “It’s an excellent case of the community coming together.”
While Silverman said that the PPP funds were an unprecedented gift, she was disappointed to hear the JFS’s first application was not assigned a number before the money ran out during round 1. The JFS provides counseling and case management, and without the funding, it would leave several clients in the lurch.
“Nonprofits are an important piece of the community. We work hard for very little and we’re addressing social issues that not many are,” Silverman said. “The money didn’t save us; it saved our ability to take care of the community.”
Like many businesses, the nonprofit sector is feeling the pain from coronavirus pandemic. Many canceled fundraisers and grant money have strings attached. In Delaware, many state nonprofits were left with relatively low amounts of cash on hand, according to a survey put out by Delaware Alliance for Nonprofit Advancement.
“It’s like any other business: Cash comes in and cash comes out. But there’s so much complexity based on what industry the nonprofit is in and their funding sources,” said DANA President and CEO Shelia Bravo.
In addition to frustrations of complicated applications and slow bank enrollment, Bravo said nonprofits could struggle with the process unless they had a dedicated accountant on staff.
But the NDC and its partners also had that covered. Volunteers helped walk them through the process, while staff was on hand to underwrite many loans as possible.
“Even beyond dollars, it’s a labor-intensive process than just a traditional bank asking for [the funding],” said Amy Walls, assistant community reinvestment act director for Discover Bank. “These are new clients, and you have to do everything you need to set them up for a new account. It’s great that they were willing to commit staff resources to this as well.”
Heartened by the generosity during this time, Bravo hoped that moving forward during this pandemic, the community holds on to the lesson that people are the heart
“It’s not the bricks and mortar that everyone focused on, it was the people,” she said. “Funding people is just as critical as funding the initiative, because even if the offices are closed, there’s a lot of them still doing the work. This needs to serve as a reminder of what our impact is to our communities.”
Contact Katie Tabeling at ktabeling@delawarebusinesstimes.com
