CEO Message | From Emergency Loans to Preventing Displacement: Marking a Transition in NCG’s Support of the Bay Area’s Nonprofit Sector

Thursday, June 7, 2018

More than 40 years ago, changes in federal funding practices undermined nonprofits dependent on those funds to maintain steady cash flow and financial stability.  To address this, a group of local funders came together in 1973 to establish the Emergency Loan Fund (“ELF”) at Northern California Grantmakers. The ELF provided relief in the form of low-interest loans to nonprofits experiencing short-term cash flow challenges. It was a critical resource in our community for decades.

Over time, changes in federal and state funding policies and the emergence of other resources resulted in steadily diminishing demand for ELF assistance.  Ultimately, NCG’s Board of Directors made the decision to suspend the fund and redesign it to better meet the current needs of nonprofits. 

Today, the top threat to nonprofit sustainability in the Bay Area is displacement due to skyrocketing commercial rents.  This alters the character of our neighborhoods, removes key service and safety net organizations from the places they were built to serve, and has other long lasting impacts, with low-income and people of color often hit hardest. 

Recognizing that growing numbers of nonprofits were requesting additional support for space and confronting significant challenges to maintaining a presence in the communities they serve, funders from across the Bay Area turned to NCG to discern whether the individual concerns they were fielding from nonprofits amounted to a regional crisis. NCG conducted a survey of Bay Area nonprofits; the stark findings made local headlines.

In partnership with several funders, NCG launched the multi-stakeholder Nonprofit Displacement Project in 2016 to engage nonprofits, the public sector, philanthropy, and private interests in developing solutions to the growing problem of disappearing affordable space for nonprofits. The Nonprofit Displacement Project seeks to increase the sustainability and resiliency of nonprofits by building their real estate asset acquisition and management capacity, supporting access to existing space, development of new affordable space, and advancing policy solutions. Currently, the project is developing a policy agenda and exploring the feasibility of establishing a real estate holding entity, similar to the CAST model, to support nonprofits seeking to purchase and lease space.

The Nonprofit Displacement Project affords NCG a perfect opportunity to deploy ELF funds in alignment with their original purpose – to strengthen Bay Area nonprofits – within the context of the contemporary challenges they face. The ELF funders agreed to repurpose the funds for use in this way, and on May 10th the NCG Board of Directors ratified this decision.

We are excited to take this next step with our Nonprofit Displacement Project.  We look forward to sharing more updates in the coming months as we continue to work together to strengthen our nonprofit sector.