Historically, nonprofits have had two main challenges that prevented their ability to finance solar projects. First, nonprofits are excluded from utilizing tax benefits because they have no tax liability due to their 501c3 status. Second, nonprofits don’t always have reserves robust enough to pay for capital investments. BAM and CollectiveSun solve these with:
1) an innovative financing model that allows a portion of the tax benefits to be utilized, thereby reducing the overall cost of the project by 10%,
2) a proprietary crowdlending campaign methodology and online platform that facilitates loans from community members who are repaid with annual principal and interest payments using the savings from the solar project.
Additionally, our unique crowdlending campaign differs from donations because it doesn’t require the pastor or nonprofit leader to go to his or her supporters with their hands out asking yet again for another donation. Instead they are able to offer an investment opportunity that facilitates financial and environmental benefits for all involved. With donations a person gives and only receives a write-off, but with a crowdlending investment there’s an ancillary or intrinsic benefit because supporters feel a sense of ownership and pride each and every time they see the solar panels on the roof of the nonprofit they love and support.
Under traditional PPAs, a large Bank, a Wall Street investor or another unaffiliated entity is profiting from the financing of your nonprofit’s solar project. BAM and CollectiveSun’s crowdlending campaign is different because it allows community members to participate and keeps dollars in the community. In short, a small group of supporters from the nonprofit provide a loan (an unsecured note) to the nonprofit. The nonprofit uses the loan to pay the prefunded PPA amount (90% of the installer cost). Whether you choose to fund your solar project with CollectiveSun or with someone else, there will always be someone making money on the transaction. We believe the community investors should be that “someone” because;
Another way of looking at it: getting financing from a large Bank or traditional solar financing company means your nonprofit is going to be paying a lot more in the long run because banks categorize nonprofits as “risky” investments and to mitigate the perceived risk, they attach exceptionally high interest rates to the transaction. Going to your community and using the BAM and CollectiveSun crowdlending platform means your nonprofit will pay substantially less and your community members are the ones that will benefit.
BAM and CollectiveSun believes the time to ask for DONATIONS is when your investors are receiving their loan repayments. During the CollectiveSun annual loan repayment notification process, when we let community members know their loan repayment is arriving and how much principal and interest they’ve earned, we give them an opportunity to donate all or a portion back to the nonprofit they love and support. This provides an option to receive a charitable deduction and recycle funds back to the nonprofit.
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