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Supercharge nonprofits with local investment!

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Supercharge nonprofits with local investment!

V.1, N.10

Oct 28

This week’s lead articles showcase nonprofits that are facilitating community investment. For example, Baltimore, by tapping into an Affordable Housing Trust Fund created by voters, is now creating community land trusts across the city to provide permanently affordable housing on land held by nonprofits. A piece from the Brookings Institution shows how community land trusts are being developed in struggling neighborhoods in New Orleans. Indianapolis is creating a new loan fund for Black entrepreneurs.

As wonderful as these nonprofit projects are in creatively bringing together public funds, banks, and foundations, they could do more and do it faster if they opened themselves to capital from local investors. Nonprofits are exempt from the Investment Company Act of 1940, which means they can easily set up funds to expand their work. The story below from Berkshire County in Massachusetts offers an important insight. A new real estate company, called Shared Estates, has been formed to help revitalize historic properties and make them available for affordable, short-term rentals. The company is using investment crowdfunding to grow its portfolio. While Shared Estates is for-profit, it easily could be a nonprofit given its mission of historic preservation. So, let’s mash these things up together. In addition to making good business sense, using investment crowdfunding for nonprofit funds could greatly accelerate affordable housing and lending to BIPOC businesses.

Before you read on, check out our growing list of Main Street Champions (now over 35)! Introduce yourself to your local champion and get busy. Or become a champion yourself here.

– Michael Shuman, Publisher of The Main Street Journal

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