Giving Compass' Take:
- Neeraj Aggarwal explains the flexible funding models that Dell Foundation utilizes to get capital to communities in need during the pandemic.
- How can funders adapt their models during the pandemic? How can donors reflect on their funding decisions from 2020?
- Learn about lean funder practices during COVID-19.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
As part of the foundation’s COVID-19 response in the U.S., we committed to deploying capital through flexible funding models suited to the needs of each of our partner organizations. Crisis response calls upon all organization types — nonprofit, for-profit, or government — to leverage their expertise and resources to assist people in need. Using flexible funding broadens the range of organizations we can work with and enables such partners to take appropriate risks in responding to the crisis.
Since March 2020, we have committed $11 million in flexible funding in the U.S. spanning debt, equity, and career impact bonds. These investments are expected to impact 40,000 families from low-income communities and have already helped provide them with 11 million units of Protective Personal Equipment (PPE).
Here are three flexible funding models that we have used to date and lessons learned from those approaches.
- Working capital loans for social enterprises
- Working capital loans for nonprofits
- Growth capital for companies serving low-income families
The pandemic has created unexpected challenges for the communities we serve and opportunities for our entrepreneurial partners to broaden and deepen their impact. Below are three learnings based on our experimentation with these partners.
- The right funding can enable for-profit companies to address pressing needs.
- Nonprofits and social enterprises often face hurdles commencing government contracts due to lack of cash reserves.
- Federal stimulus funds often face hurdles reaching individuals or households.
Read the full article about impact investing models by Neeraj Aggarwal at Dell Foundation.