NFF Capital Partners helps nonprofit organizations attract the equity-like capital they need to support significant transformations of impact, scale, quality (or all three). Acting as a benevolent broker, Capital Partners helps to facilitate capital campaigns of $5 million or greater, so that management teams can focus for a year or more on perfecting the high quality programs and revenue-generation capabilities that ultimately will sustain them.

Our core product is the Sustainable Enhancement Grant, or SEGueSM. If an organization has a clear plan to enhance its ongoing level of social impact, combined with a clear plan for how that enhancement will be sustained, it may be well-suited for a SEGueSM.

NFF Capital Partners is not in the business of raising money. Rather, we are in the business of helping our nonprofit clients to raise money, and our funder clients to deploy money in powerful ways.

NFF’s SEGueSM product provides philanthropic investors with a clear and auditable record of the organization’s progress towards self-sustaining operations, along with a clear record of how much growth capital is consumed along the way. We view this to be a particularly healthy dynamic, not only from an investor perspective, but also from a mission perspective, since financial sustainability is key to establishing strong and vital social purpose institutions.

Typically, our assignments involve capital campaigns of $5 million to $30 million. As a trusted intermediary, our role is to perform financial due diligence in anticipation of funder questions, to assist the organization in preparing an investment prospectus, to design the SEGueSM accounting treatment that will be used to monitor investment flows, to draft a provisional investment term sheet that promotes equity-like behaviors, and, after the money has been raised, to provide several years of investment monitoring and reporting services on behalf of all investment parties.

NFF Capital Partners Product Offerings

SEGueSM Readiness Assessments

Engage with the senior management team to evaluate prospective fit of an organization with a SEGueSM equity capital campaign. Involves assessment of the following criteria: Business Plan, Fundraising Context, Management Team Readiness, Board Capacity, Social Return on Investment, Enterprise Capital Structure and Requirements. Output is a recommendation to pursue or abstain from a SEGue and an indication of a path way to readiness.

SEGueSM Services

All of our SEGueSM Services engagements anticipate a successful raising of $5 million or more in nonprofit (501 c-3) enterprise capital. The range of services required, and the cost of these services varies a great deal across clients, depending upon their state of preparation, and upon the intrinsic complexity of their nonprofit enterprise. Components of the work typically include:

Enterprise Design and Financial Planning

Evaluate the existing and planned business models for the organization. Involves assessing current operations and creating and/or assessing a drivers-based economic model. We help to crystallize what sustainability looks like for the organization and we create a financial plan that works backwards from that goal. Output is a model and description of the operating dynamics.

Building upon the enterprise design and financial planning work described above, evaluate the full capitalization needs of the enterprise. This includes not just growth capital, but also risk capital, working capital, capital for facilities and equipment, and pools of capital that may be managed for others. Output is an estimate of the level of capitalization required of each type, and often recommends and optimal structure of debt vs. equity in achieving the desired enterprise capital structure.

Due Diligence Services

In anticipation of prospective investors’ inquiries, create materials that add transparency and clarity to the investment proposition. Vet the financial model, reveal the critical assumptions, assemble benchmarks, clarify the milestones that must be met, document the track record, identify and compile essential legal/financial records, etc. Output is a due diligence binder that prospective investors can use efficiently to evaluate the enterprise and its plan. NFF Capital Partners does not, in any way, guarantee that client plans will be enacted or achieved.

Prospectus Writing Support Working closely with client staff, we provide support in translating a pre-existing detailed business plan into a high quality prospectus. Involves engaging in developing an outline, key story elements, drafting specific sub-sections, and editorial support. (NFF Capital Partners is not in the business of unilaterally drafting our clients’ prospecti.) Output, in conjunction with client team, is a completed prospectus document.

SEGueSM Accounting Support

Assist clients in implementing a formal SEGueSM accounting treatment, and in working with their auditors and lawyers to resolve related issues. Output is a pro-forma example of future SEGueSM accounting statements that has been reviewed and accepted by the client’s auditor, lawyer and internal senior management.

Deal Structuring & Transaction Support

Aid nonprofits and their funders in drafting detailed deal terms in the form of a Principle SEGueSM Term Sheet and a SEGueSM Subscription Agreement. Assist clients in the mechanics of orchestrating the transaction, including the document mark-up process, legal review, creation of definitive documents, communication of wiring instructions, confirmation of receipts, filing of executed agreements, and establishment of an ongoing process for investor communications. Output is a fully executed SEGueSM transaction.

Fundraising Consultation

Where appropriate, assist clients in identifying, approaching and interacting with prospective investors. This is not a core NFF Capital Partners offering – we expect our nonprofit clients to drive their own fundraising efforts. However, NFF Capital Partners can be helpful in making introductions and otherwise sharing insights on how to conduct a successful campaign.

Performance Reporting Support

Help clients to design an ongoing reporting design and process that supports the SEGueSM methodology. We encourage a balanced scorecard approach that reflects not just measures of social impact, but also progress towards a sustainable business model, consumption of SEGueSM capital, and the social return on investment earned by SEGueSM investors. In some cases, NFFCP takes on a formal certification role on behalf of all the SEGueSM investors, where we visit with the nonprofit regularly throughout the investment term, and we spot-check the reporting methodology to help ensure a valid, timely and accurate information feedback loop.