Happy 15th Birthday, Capital Good Fund!

Capital Good Fund has a lot to celebrate. It has been 15 years since our nonprofit CDFI was founded on February 10, 2009, to create pathways out of poverty, address predatory lending, expand access to green energy, and support immigrants on their path to citizenship. In our first 15 years, we have financed over 14,000 loans and solar leases totaling more than $42 million with a 97% repayment rate. We are serving low- and moderate-income (LMI) families in eleven states: our home state of Rhode Island, Texas, Georgia, Illinois, Florida, Delaware, Massachusetts, Colorado, New Jersey, Connecticut, and Pennsylvania. More than 2,300 people have graduated from our nationally recognized Financial Coaching program that helps clients build their credit and establish a financial plan that enables the achievement of life goals.

Anniversaries are a great time to reflect on the past and set goals for the future. We asked Capital Good Fund founder and CEO Andy Posner for his thoughts.

How is Capital Good Fund doing as it turns 15?

It feels like the past 15 years both went by in the blink of an eye and have been a very long journey, but I’ve never been more excited about our work. We’re growing and connecting with a lot of external events that align with the path we want to pursue toward realizing our mission. We’re proud of the impact we’ve had and the lives we’ve changed. We’re enabling LMI people to save money and improve their credit score, while providing equitable loans to help them meet their goals whether it’s making a security deposit to get into a safe apartment, avoiding deportation, or making their home more energy efficient.

What would the world be like without Capital Good Fund?

I don’t think there’s anyone else that’s demonstrating a model for consumer lending that’s equitable. For example, in Illinois, you could argue that it would be less likely that they would have passed the Predatory Loan Prevention Act, which basically got rid of predatory lending in the state. I think that there are a lot of credit unions, banks, and other nonprofits that have gotten into consumer lending, thanks to our model and track record of success. And then, of course, you’d have over 16,000 families who wouldn’t have gotten the benefits of our services directly.

What have you learned over the last 15 years?

Making money is easy if that’s all you care about. Doing good is hard. Even though we know how to solve the problems we face–income inequality, climate change, you name it–there is a lack of people working on the implementation side, too many people intentionally or inadvertently working on the side of injustice, and not enough money and public policy supporting the solutions that we already have at hand.

I would also say to people who want to work toward social and environmental change to consider that there are multiple pathways to achieving impact. Don’t assume that you need to start a nonprofit. When I started thinking about this idea, I did a scan and found there was nobody else doing the work I wanted to do, so launching my organization made sense. But starting a nonprofit is a ton of work, and it takes many years to get it to the point where it has any meaningful scale and has the infrastructure to scale. So think carefully about the right vehicle to bring an idea to fruition and then also do it in the lowest stakes way possible. Also consider the importance of working in government, at the local, state, or federal level. That can mean running for office, working on a campaign, or for an elected official, government agency, or legislative body.

What’s the biggest challenge you’ve had to overcome as an organization?

One thing that’s challenging about being a nonprofit lender is that not only do you have to raise grant dollars for your operating costs, but you also have to borrow the money that you’ve lent out. We do have the advantage that about a third of our revenue comes from our interest income. So that is unique. A lot of nonprofits don’t have that. I would say the other challenge is striking a balance between scale and impact and how to grow your technology so that you can reach people remotely and still change their lives without meeting them in person.

What was the biggest external curveball Capital Good Fund has encountered?

It was COVID. We grew a lot because we responded and pivoted to creating a whole new product, which was the Crisis Relief Loan. It took us down a very different path but showed that we can be immediately responsive to community needs. People noticed how our clients benefited from it, which drew the attention of high-profile outlets like the Wall Street Journal. The product also attracted significant funding, which allowed us to build up a lot more capacity to handle growth. Most importantly, the Crisis Relief Loan ultimately reached 3,000 families struggling to manage cash flow during the pandemic; it has since become the Impact Loan, which has reached another 3,000 families now struggling with challenges like inflation, especially rising energy costs.

What are the major catalysts for growth for you?

The biggest one right now is the Inflation Reduction Act and the policies resulting from it like the clean energy tax credits and as well as the Greenhouse Gas Reduction Fund (GGRF), which is a very large pool of money–$27 billion, to be exact–exclusively for serving lower-income families with clean energy, energy efficiency, and the like. We are optimistic about receiving a significant allocation–in the tens and potentially hundreds of millions of dollars–from the GGRF, and we will use to serve thousands of households over the next five years. That far and away is the biggest catalyst for our future growth. Everything else is more incremental but still highly impactful. 

What are your goals for the future?

A lot more scale and a lot more impact. I hope that 15 years from now, we will have helped implement important policies that support our mission and benefit the clients we serve, such as expanding the Earned Income Tax Credit, pathways to citizenship for undocumented immigrants, and a national interest rate cap of 36%. I would like our nonprofit to be a household name and I would like us to be large enough to be able to start a credit union or bank with hundreds of thousands of clients.