First-of-its-kind private pay-for-success donation fund supporting resilience and recovery efforts post-COVID-19 for ~600 Colorado residents

Four Colorado nonprofit organizations selected to receive donations --
ActivateIT, Bridge House Ready to Work, CrossPurpose and LaMedichi Savings Clubs

Donors include The Anschutz Foundation, Colorado Health Foundation, The Denver Foundation, The Newhouse Family, Telluray Foundation and other prominent philanthropists

DENVER, Oct. 19, 2020 (GLOBE NEWSWIRE) -- NPX, a company transforming how nonprofits are funded, today announced their inaugural Colorado Donor Impact Fund (“DIF”), a $5.6+ million philanthropic fund to incentivize quantifiable, long-term impact for underserved communities struggling to stabilize in the wake of COVID-19.

Thirteen Colorado foundations and philanthropists came together to pioneer this new funding model. Together with NPX, they selected four nonprofits to receive donations to drive upward economic mobility for over 600 people -- ActivateIT Powered by Per Scholas, Bridge House Ready to Work, CrossPurpose and LaMedichi Savings Clubs.

"The NPX team has earned the highest respect of the donors and nonprofits alike for their focus on understanding impact: how to measure it, how to incentivize it, how to improve it. I am so excited to see how our nonprofit partners use investor's flexible operating capital to take their already excellent programs to another level,” said Sharon Schneider, Executive Director of the Telluray Foundation.

“We look forward to seeing the nonprofits we selected creating additional economic value for people in our communities using this creative philanthropic model,” said Ted Harms, Executive Director of The Anschutz Foundation.

“NPX applauds both the donors for blazing a new trail and the selected nonprofit organizations for leading the way in measurement, evaluation, accountability and transparency. They’re the first of many to be funded based on results” said Lindsay Beck, Co-Founder & Co-CEO of NPX. “This new funding model is driving significant behavior change amongst donors, investors and nonprofit organizations -- behavior change that will result in better outcomes for more people in Colorado and beyond.”

A Groundbreaking Philanthropy Model
The DIF is a private pay-for-success donation fund that releases donations based on results.

Traditional or “public” pay-for-success models such as social impact bonds have been used by innovative governments around the world, but to date few private philanthropists have used the model to make performance-based donations.

Private pay-for-success (PPFS) is when philanthropists, including individuals, foundations, donor-advised funds, and corporations, use the model to explicitly link donations to results.

To make it easy for donors to put this model into action, NPX created the DIF. It is different from other philanthropy models in two ways. First, donations from the fund are released only if impact is achieved. Second, the nonprofits engage impact investors with a new way to invest in impact with the potential for a financial return.

The DIF releases donations after impact happens, instead of donating upfront. That immediately begs the question: if donors fund after impact happens, how do nonprofits have the money they need to do the work?

That’s where impact investors come in. They provide the upfront capital to the nonprofits through the purchase of performance-based debt securities. The investors are paid over time by the nonprofit issuer from funds it receives from the DIF if and when impact is achieved.

Simply put, results drive the flow of funding. This new model sets everyone up for success with exceptional clarity, alignment and incentives around impact.

Colorado DIF
The Colorado DIF closed on May 1, 2020 and immediately began a rigorous nonprofit selection process. To address the medium and long-term fallout of COVID-19 and the resulting recession, NPX evaluated more than 90 nonprofits in three economic mobility categories: barriers to work (food, housing, childcare, transportation), education and employment (post-secondary completion, job training and placement) and financial security (saving, borrowing, financial planning).

Four nonprofits were selected to receive performance-based donations over the next two to four years as they achieve their impact goals -- ActivateIT Powered by Per Scholas, Bridge House Ready to Work, CrossPurpose and LaMedichi Savings Clubs. The donation amount varies based on what each nonprofit needs to run its program, and measure and audit impact.

The Colorado DIF has the potential to drive upward economic mobility for ~600 people in Colorado.

“NPX is innovating to bring needed investment capital to the nonprofit sector through a novel pay-for-success financial vehicle,” said Kathryn Harris, Managing Director of ActivateIT Powered by Per Scholas. “We can spend our time and limited resources focused on creating impact – moving people out of poverty to self-sufficiency through the dignity of work. This is our core competency, not fundraising.”

“It has never been more important for nonprofits focused on social services to find ways to deliver more impact,” said Mark Newhouse, Co-Founder of the Left Behind Workers Fund. “I am confident NPX’s model will make nonprofits more effective, increase the impact of donor dollars and provide a path for investors to invest in truly positive social outcomes. This is why I am proud to be a donor in the Colorado Donor Impact Fund.”

The DIF model is easily replicable and could be deployed in every state in America where donors want to drive results. NPX also announced today a DIF in the San Francisco Bay Area with 23 visionary women philanthropists, including Stephanie DiMarco, Katie Hall, Julia Hartz, Katie Schwab Paige, Liebe Patterson and others.

DIF PARTICIPANTS
Donors

NPX Economic Mobility Team
Subject matter and monitoring & evaluation experts working with NPX to create the DIF nonprofit portfolio.

Partners

Press Contact
Larkin/Volpatt Communications
Michael Volpatt
michael@larkinvolpatt.com
415-994-8864‬

About NPX
NPX is changing the way nonprofits are funded by explicitly linking funding with impact performance. Learn more at www.npxadvisors.com.