Climate Adaptation for Underserved Communities
CNote’s Climate Cash™ enables charitable funds of all sizes to deploy cash in the form of deposits into a network of mission-driven banks and credit unions that are working to combat climate change. All deposits are deployed to fund carbon reduction activities in low- to moderate-income communities and communities of color. Every dollar deposited is protected by 100% FDIC or NCUA insurance coverage with competitive interest rates. CNote’s impact reporting provides data on the positive climate activities supported by Climate Cash™ deposits.
Example initiatives supported by the Climate Cash™ solution include:
- Installing affordable solar power in low-income communities
- Funding energy-efficient appliances and green home/building upgrades
- Increasing access to electric vehicle financing to reduce emissions
The fund invests in Certificate of Deposits (CDs) issued by federally-certified Community Development Financial Institutions (CDFIs) and Low-Income Designated Credit Unions (LID-CUs). All CDs that are a part of this fund are fully insured by the FDIC (Federation Deposit Insurance Corporation ) or NCUA (National Credit Union Administration). Capital invested in the fund is illiquid for a 24-month term.
- 3%+ Expected Return: Climate Cash™ deposits are expected to accrue interest at an annualized rate of 3% or more.*
- 2-year Term:Principal and interest will be returned at the end of the 2-year term and can be re-invested or deployed for another charitable purpose.
- Regions Served: National.
- Minimum: The minimum to invest in CNote Climate Cash™ is $1,000 per DAF.
*Note: Interest may vary based on prevailing business and economic conditions.
Help Israeli Small Businesses Struggling to Survive the War
Restaurants, arts centers, hotels, and other small businesses help make Israeli life and cultural fabric unique in the world. Small businesses constitute 45% of Israel’s workforce. 98% of these businesses have fewer than 10 employees.
Unemployment has increased significantly since the outbreak of the war. Israel’s economy continues to face significant headwinds with higher inflation and slowing economic growth.
The small business ecosystem is the most vulnerable and has the most immediate financing needs. And small business represent the majority of businesses that have been forced due to related labor shortages and reduced sales activity. Sustaining the small business ecosystem is crucial to many in Israel, including reservists who own or are employed by these enterprises.
Catalytic Capital for Israel: The Initiative
Catalytic Capital for Israel (CCI) pools capital from donor-advised funds (DAFs) to invest in Israeli small businesses that have been impacted by the ongoing war. A nationwide initiative in partnership with Jewish Federations of North America (JFNA), CCI aims to raise loan capital to increase the capacity of Israel’s leading nonprofit social lenders to make affordable loans to struggling small businesses.
Leveraging an Established Impact Investing Program
Since 2021, the Federation has invested in leading social impact lenders in Israel, including Ogen and KIEDF, through its Impact Lending practice. To date, Federation DAFs have collectively loaned out close to $56M, including $4M in Israel to support small and micro businesses. These loans maximize philanthropic impact while earning concessionary returns, and at the end of the term, the capital is returned to the DAFs to be used again. This capital recycling multiples impact by making the same money available again for future charitable purposes.
Even before the war, Israeli small business owners and nonprofits were routinely underserved by commercial lenders and government programs that focus on larger businesses. A network of long-standing and new impact focused Israeli social lending platforms offers fair, affordable credit and provides loans on a low-interest, nonprofit basis to help small businesses.
Leveraging the Federation’s robust impact investing program, DAFs can easily make an investment in the CCI small business loan pool and directly support social lenders in Israel that are helping small businesses survive in these difficult times.
- 1-3% Expected Return: This loan pool is targeting a 2-3% annual return net of fees.*
- 5-year Term: Principal will be returned at the end of the 5-year term and can then be re-deployed for another charitable purpose.
- Regions Served: Israel: With focus on the North and South
- Minimum Investment: The minimum investment in CCI is $1,000 per DAF
*Note: Returns and principal repayment are expected but not guaranteed.
Israeli Social Lending Platforms
Interest-free Loans for the Jewish Community
Hebrew Free Loan allows donors to provide capital for interest-free loans to people in need throughout the Northern California Jewish community. When donors lend money to Hebrew Free Loan from their donor-advised funds (DAFs), they make it possible for the agency to continue helping individuals, families, and small business owners overcome financial challenges and build lives of dignity and meaning.
Hebrew Free Loan’s model is based on the ongoing recycling of loan funds. The organization makes interest-free loans to those in need, loan recipients pay the money back, and Hebrew Free Loan lends it out again to support the next person. With a loan repayment rate of over 99.5%, this model has kept Hebrew Free Loan sustainable for over 127 years.
However, successive waves of extraordinary need have disrupted Hebrew Free Loan’s sustainability. During the Covid-19 pandemic, loan requests far outpaced funds available to lend, and Hebrew Free Loan faced the distinct possibility of turning people away. It happened again in each of the past two years, when requests for assistance poured in from people struggling with inflation, high interest rates, an unstable job market, and pandemic-depleted savings.
Hebrew Free Loan disbursed $8M in loans in 2022-23 and $8.7M in 2023-24. This is over 50% more than was typically loaned out before the pandemic. Thanks to impact loans from the Federation’s donor-advised fundholders, Hebrew Free Loan has not yet had to turn anyone away for lack of resources.
These high levels of need appear to be the “new normal,” with projections for the current fiscal year similar to the past two years. Impact loans from DAFs help bridge the gap between the funds available to lend and what Hebrew Free Loan needs to meet the increased demand. These impact loans will provide capital to ensure that Hebrew Free Loan can continue to serve all qualified applicants who come to them for assistance.
