Capital Good Fund launches $4M direct public offering

ANDY POSNER, founder and CEO of the Capital Good Fund, said a direct public offering has been launched to generate 17,000 loans over the next five years. / COURTESY SOCIAL CAPITAL FUND
ANDY POSNER, founder and CEO of the Capital Good Fund, said a direct public offering has been launched to generate 17,000 loans over the next five years. / COURTESY SOCIAL CAPITAL FUND

(Updated 2:35 p.m.)
PROVIDENCE – The Capital Good Fund is launching a $4.25 million direct public offering aimed at generating 60 jobs and 17,000 loans over the next five years.
The nonprofit provides small personal loans and financial coaching to low-income Rhode Islanders.
A direct public offering is a financial tool that allows nonprofits to raise money in the form of debt, said Andy Posner, founder and CEO of Capital Good Fund.
“What we’re doing is going out to solicit support from individuals and institutions, and instead of asking for donations we’re asking for investments in the form of loans,” he said.
Loans of as little as $1,000 each will be paid back with as much as 5 percent interest over a minimum of seven years, he said.
In an informal launch the week of Oct. 19, seven lenders committed $120,000, with the bulk of that – $100,000 – coming from the Hassenfeld Family Foundation. The official launch will be at 1 p.m. Nov. 17 at the Statehouse.
“Large-scale problems require large-scale solutions,” said Posner, “but nonprofits often lack the resources to meet these challenges. This offering represents an innovative approach that provides social investors with financial as well as social returns and creates a new model for change.”
Whereas philanthropic funding “amounts to a zero-sum game,” he added, “the capital markets give us access to a nearly limitless source of funds with which to grow. With $4.25 million in investments, we will take a big step toward fulfilling our social mission.”
Said General Treasurer Seth Magaziner, “Capital Good Fund’s debt offering represents an exciting new model for how nonprofits can scale through earned-income strategies. For the past six years, Capital Good Fund has used financial services to serve Rhode Islanders. Now, they are blazing a trail for social enterprises throughout the nation to strengthen their finances and better serve their communities.”
Alan Hassenfeld, president of the Hassenfeld Family Foundation, said he is “proud to invest $100,000 in this debt offering so that thousands of families will have the tools they need to take care of their families.”
For information, interested investors can visit Social Capital Fund, Capital Good Fund’s sister nonprofit and debt issuer, at www.socialcapitalfund.org, or contact Posner at andy@capitalgoodfund.org.

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