April 16, 2007 | Read Time: 1 minute
The recent spate of museums and universities selling their prized artworks demonstrates the difficulty many nonprofit groups face when they attempt to raise capital, writes the anonymous author of The Nonprofiteer.
The author offers a solution: develop a system similar to the micro-lending approach used to help drive money to aspiring businesses in developing countries. And the writer proposes using money from nonprofit endowments as the capital.
“We have needs but 95 percent of our money is unavailable to meet them,” writes the Nonprofiteer, noting that many colleges, hospitals, and other well-endowed nonprofit groups use only a small part of their endowment each year to pay their operating costs. “But what if well-endowed institutions used that 95 percent to create a loan fund for other nonprofits? That is, what if the entire investment policy/strategy of the big nonprofits consisted of lending to small nonprofits? Socially conscious investing, indeed!”
Do you support this approach? Click on the comments link just below this posting to share your opinions.
