Project for Pride in Living, Inc. (PPL) is a nonprofit organization based in Minneapolis, Minnesota working to empower low-income people to become self-reliant through myriad services including housing, employment training, support services, and education. PPL was founded to help create more affordable, respectable housing opportunities for low-income residents, and has evolved to become a multi-service agency that serves more than 13,000 people annually with their holistic approach to self-sufficiency.
For many Minnesotans, PPL needs no introduction. They are indeed one of the longest-running, strongest, most well-established nonprofit organizations in Minnesota. That reputation has allowed PPL to establish consistent financial partnerships to help them develop and maintain their now-1,100+ housing units they own or manage. But when the Great Recession hit and the real estate bubble burst in the late 2000s, all real estate developers—including PPL—had to begin thinking more creatively than ever to keep their projects on track.
Around 2011, PPL was in the middle of development of the Fort Road Flats on Snelling and West 7th in St. Paul. They were facing pre-development costs, and needed to find a flexible partner to help finance the project—a prospect that was more complicated and unappealing to traditional lenders, given the economy.
“[Propel Nonprofits (formerly Nonprofits Assistance Fund)] was so flexible,” PPL’s Chief Financial Officer Jack Katzmark told us. “They looked not just at the project itself, but also at PPL and the strength of our organization overall. They provided us with a line of credit to help bridge the gap between pre-development and the financing close. Propel Nonprofits stepped in at a very important time, providing us with the financing structure we needed to continue moving forward on what I think people would say has been a significant success for St. Paul and the affordable housing landscape.”
After the initial line of credit, Propel Nonprofits supported PPL in 2014 through their former subsidiary Momentum Enterprises, helping the organization(s) through a temporary cash flow crunch as they were working to offload some real estate. When the property sold, they immediately repaid the line of credit. “It was so easy working with Propel Nonprofits on [the Momentum Enterprises] gap financing,” Jack said. “With a more traditional institution, we would’ve had to jump through so many hoops.”
For the Propel Nonprofits team, working with PPL is a sincere honor and pleasure. “It’s fun to work with their team, because they’re so savvy and sophisticated,” Kate Barr said. “They are a well-run organization with a great leadership team—they have all the skills and capacities needed to run a sustainable organization. And that’s exactly what they’re doing.”
While a nonprofit as large as PPL has strong internal capabilities—the partnership has been invaluable. “Kate and her team understand the nonprofit world—our revenue streams, and our challenges,” Jack said. “There’s a great appreciation of the nonprofit world—and they’re able to provide the level of flexibility that is sometimes required in this work. Propel Nonprofits can be flexible while still meeting all regulatory and compliance criteria—quickly and creatively.”
In the next month, PPL’s line of credit with Propel Nonprofits will mature—but the partnership won’t end there. (Watch for an exciting announcement coming later in 2016!)
“Coming off of the experience we just had, I just want to work together and have that partnership,” Jack told us. “And we’ll definitely have a need for financing arrangements in the future. I was pleasantly, absolutely surprised by it all and it was a wonderful experience—which I don’t say too often!”
“We’re not doing anything bread and butter for PPL,” Kate said. “The finance geek in me is always proud of the work we do for them—all of it is creative and unique, and that’s a thrill for us.”
When he reflects on the past few years of PPL’s relationship with NAF, Jack offers some insights for other organization leaders:
“What I learned was that, yes, Propel Nonprofits is local and works with many smaller nonprofits—but Kate and her team are so effectively and quickly able to leverage their networks and partners so the resources they bring to the table go beyond just their internal products and teams.”
“Propel Nonprofits provides technical advice and professional insight that goes beyond strictly the financial transaction. In my mind, Kate proves her weight in gold.”