ATLANTA, GA - Community Housing Capital (CHC) has undertaken a ground-breaking initiative to test crowdfunding in a new way. Crowdfunding is a method for raising funds online that uses social media and peer-to-peer sharing. To date, it typically has been used by individuals to fund specific projects. It has never been used in this way – to fund an ongoing mission. In this case, CHC is using it to provide affordable housing and stabilize communities nationwide, and this pilot may inspire other national nonprofit organizations to use it as well.
CHC provides financing to nonprofit organizations that are members of the NeighborWorks® network. These organizations create and preserve affordable housing for people who work hard but may not have access to quality housing they can afford, at reasonable interest rates – people like firefighters, nurses, veterans, teachers, seniors, farm workers, the disabled, small business owners and others.
By launching the pilot, CHC is pioneering this approach to determine whether crowdfunding is a feasible fundraising strategy for the affordable housing field. If successful, this could change the dynamic for cause-oriented resource development.
CHC’s business model offers extra incentive to contributors interested in long-lasting impact. According to Debbie Campbell, CHC’s Vice President, Investor Relations, “The impact of this pilot has the potential to grow exponentially, thanks to leverage of additional capital and the revolving nature of CHC’s loans, where loan repayments continue to fund new loans to benefit additional families and additional communities long after the original donation is made.”
The pilot is drawing attention across the industry. Several leading organizations in the community development/affordable housing industry have voiced support for this innovative effort, including Opportunity Finance Network, City First Enterprises, NeighborWorks America and the National Association of Affordable Housing Lenders.
CHC worked with Paul Dombowsky from Ideavibes, which works with organizations across North America and Europe helping them integrate crowdsourcing and crowdfunding into their efforts to make change happen and do things differently.
CHC got the idea to explore this strategy at a conference hosted by Opportunity Finance Network, at which Dombowsky was a presenter. “We are delighted that OFN was the catalyst for this exciting experiment in affordable housing finance,” said OFN’s President & CEO, Mark Pinsky. “We applaud CHC for taking the first step in this bold initiative.”
“With this effort, CHC is an innovator, taking advantage of the universal adoption of web-based social networking to launch a better way to engage donors,” said Dave Wilkinson at City First Enterprises, a national leader in CDFI-Crowdfunding policy. “Community development efforts beyond the affordable housing industry will likely benefit from lessons learned from this exploration.”
Community Housing Capital is a national loan fund which promotes affordable housing and community development by financing nonprofit community development organizations across the country.