Nonprofit’s loans, services remove barriers to success

Andy Posner is the executive director of the Capital Good Fund, a nonprofit agency in Providence that provides a variety of financial services to those in need. Their goal is to help those experiencing poverty by providing microloans, personal financial coaching and free tax preparation.
This year has been a banner one for CGF: the organization played a role in Pleasant View Elementary School, of Providence, receiving a $470,000 grant and has received an $81,273 Community Development Financial Institutions Technical Assistance grant from the U.S. Treasury.
In October, CGF was chosen by state Treasurer Gina M. Raimondo to assist in her push for financial literacy, called Empower RI.

PBN: How was the Capital Good Fund created?
POSNER: In my master’s program I was working on financing mechanisms for green energy and energy efficiency. In doing so I ran into “Banker to the Poor,” a book by Muhammad Yunus, the 2006 Nobel Peace Prize winner.
I saw a lot of parallels because this was financing to unlock the potential of the poor, whereas my study had been financing clean energy. Not long after I read it the economy collapsed and suddenly there was an urgency for providing people with financial services.

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PBN: How did you transition from your master’s?
POSNER: I had been working with Alan Harlam, director of social entrepreneurship at the Swearer Center for Public Service at Brown. He introduced me to Mollie West, a senior, and we co-founded the organization. We incorporated Feb. 9, I graduated in May and I have been doing this ever since.

PBN: How does a brand new nonprofit get funding for microloans? POSNER: I think of it as three accounts. One is our loan account, which is by and large money that we borrow at 1 or 2 percent from individuals. We then use that money to make our loans. On the operating side, we are more like a traditional nonprofit. Funding comes from local financial institutions, the Catholic Church has been a large contributor and Brown has been a strong supporter. We also receive federal money, as well as donations.
PBN: What are the loan conditions and their restrictions?
POSNER: We currently provide personal loans up to $2,000 for almost any reason, and up to $5,000 for a business. We do not have a minimum credit-score requirement, we don’t take collateral. We have a very unique process because we lend to the very poor. We have our clients go through financial coaching first, so we make sure they have the skills and the tools to make sure they can pay back the loan, and afford the loan it they really need it.

PBN: Are the loans paid back?
POSNER: The answer is yes. What we have found is that to really help someone out of poverty, they need more than just money. They need help with budgeting, managing debt, getting a bank account and understanding what predatory services are out there and how to avoid them. They need to know how to navigate the public benefit system, writing a resume – there’s a whole host of issues that we can help them with.

PBN: So we’re talking more than just loans?
POSNER: Yes, but the loan also helps to bring down a particular barrier. For example, someone might be taking a GED course but they don’t have a computer so they can’t do their homework assignments. We provide them with a loan to get that computer. We give loans to help people become U.S. citizens. We give loans to help people with a down payment on an apartment, or to repair a vehicle. Sometimes the loan might not directly increase their income but they knock down a barrier that they face toward achieving that goal.

PBN: What has CGF achieved?
POSNER: Since we started in 2009, we have loaned about $250,000, provided free tax preparation to about 230 people and have provided financial coaching to about 170 people.

PBN: How were you chosen to help in the EmpowerRI program?
POSNER: Soon after Treasurer Gina M. Raimondo was elected her office reached out to us to start brainstorming a way to have a statewide initiative around financial empowerment. It’s our core product. We are the only entity in the state that’s dedicated solely to equitable financial services.

PBN: What makes your financial-coaching methods unique?
POSNER: It’s one-on-one when we meet with the client. We focus on action steps they can immediately take to impact their financial situation. It’s also unique because we have a sustainable model, so we charge for the coaching but we get paid in one of several ways. One is out-of-pocket, in which case they would make 12 payments of $10 per month, and we report those payments to the credit bureaus so they are also building their credit.

PBN: Would you say that Capital Good Fund is an entrepreneurial startup for a nonprofit?
POSNER: Definitely. The catchphrase I use is “we’re what happens when Silicon Valley meets a soup kitchen.” •

INTERVIEW
Andrew V. Posner
POSITION: Executive director
BACKGROUND: Started nonprofit Capital Good Fund same year he graduated from Brown in 2009.
EDUCATION: Bachelor of arts, Spanish language and culture from California State University, Northridge, 2006; master’s degree in environmental studies from Brown University, 2009
FIRST JOB: Bicycle messenger on Paramount Studios lot, Hollywood
RESIDENCE: Providence
AGE: 27