Sponsoring FAQs

What does it mean to be a sponsor?

Being a sponsor means you provide a higher level of support to ensure the nonprofit’s campaign is successful. A private individual, Board member, foundation or financial institution can be a sponsor in one of two ways (or both): by funding a meaningful portion of the campaign target prior to the formal campaign launch and/or by providing collateral to back the loans that the nonprofit takes on.

What types of collateral can I post?

Cash or CD, as well as tradeable securities such as bonds, mutual funds, ETFs, etc.

When will the collateral be released?

When the nonprofit fully repays the loan at maturity, LENDonate will release its hold and the Sponsor may reclaim the collateral.

Can the loan campaign proceed with partial collateral?

Yes, provided majority of the loan target is covered. The loan will receive a blended rate based on their secured and unsecured rates.

Where is my collateral held?

Cash collateral will be pooled in a bank escrow account. If securities are already held at a major brokerage account, there is no need to transfer them out. LENDonate will provide the paperwork, and assets will remain under the guarantor’s name.

By how much does the ceiling interest rate come down if I provide collateral?

LENDonate will reduce the ceiling interest rate on a case-by-case basis, depending on our assessment of collateral quality and safety. In today’s environment, it may be as low as 3.5% per annum.

Can anyone post collateral on a loan?

No, only people with access and knowledge of the borrower’s financials may post collateral. This may include board members and the organization’s leadership team, such as Founder, CEO, CFO, Treasurer, or Executive Director. Institutions such as foundations with professional staff may also post collateral.

How can banks support nonprofits through LENDonate?

Banks may also be considered sponsors, although not in the same way as other organizations and individuals. If a nonprofit comes to a bank for a loan, rather than simply telling the organization they don’t qualify, consider referring them to LENDonate. We can help assess whether they are a good candidate to crowdsource collateral.

Who should get a sponsor?

Any organization that does not initially qualify for a loan, or want to dramatically improving borrowing rate may find that securing a sponsor is a great solution for their project.