Submitted by: Charitable Ventures
Written by: Livi Kerszenbaum
VISION: Reimagining Capital for Orange County's Nonprofits
The money had been approved.
But it had not arrived.
CIELO, a business incubator for immigrant entrepreneurs and childcare providers, had already delivered on its commitments. Services had been provided. Stipends had been distributed. The work was done.
The government reimbursement that would pay for it was simply delayed.
On paper, CIELO had funding. In reality, it faced a $100,000 cash-flow gap - the kind that forces even the strongest nonprofit leaders to count the days between delivering services and meeting payroll.
Co-Founder and Executive Director Iosefa Alofaituli called it financial calamity.
"We knew the money was coming, but it wasn't getting here fast enough. We wouldn't be reimbursed for at least three to six months. We had to use other funds to meet our operational obligations."
CIELO's challenge was not a failure of leadership, planning, or impact.
It was a system failure of timing.
A System Built on Waiting
Across Orange County, small nonprofits are often the first organizations families turn to in times of need. They connect children to healthcare, help survivors rebuild their lives, support immigrant entrepreneurs, care for older adults, and strengthen neighborhoods long before larger systems can respond.
Many of these organizations are exceptionally well led. They deliver measurable outcomes, steward public dollars responsibly, and earn the trust of their communities.
Yet they often lack one essential business tool: access to affordable working capital.
Unlike traditional businesses, nonprofits rarely have unrestricted reserves or access to conventional lending. Government contracts and grants frequently reimburse expenses long after services have been delivered. Organizations are expected to respond immediately to community needs while waiting months to receive payment.
A nonprofit can have strong leadership, sound financial management, committed future revenue, and a proven track record, and still find itself navigating the space between a promised reimbursement and the next payroll cycle.
Over decades of working alongside emerging nonprofits, Anne Olin, Founder and CEO of Charitable Ventures, recognized that these weren't isolated cash-flow crises.
They were symptoms of a larger structural problem.
Nonprofits were increasingly expected to operate like businesses while being denied access to one of the most basic financial tools businesses rely upon every day: working capital.
As Anne explains, "There is a tension we live with in this industry. You hear it frequently: 'If only nonprofits could run like businesses...' or 'There are just too many small nonprofits…some should go away.' Both observations contain some truth. But they describe the symptoms, not the problem. The larger issue is how nonprofits are capitalized, or more accurately, how they are not."
The question became clear:
What would it look like if small nonprofits had access to flexible capital before a timing gap became a community crisis?
Turning Vision into Infrastructure
Charitable Ventures had quietly been providing bridge loans to its fiscally sponsored projects for more than a decade using its own reserves. As the need continued to grow, it became clear that an informal approach would never be enough.
Building a lasting solution required partners willing to rethink how philanthropy supports nonprofit sustainability.
Bringing visionary partners together, Charitable Ventures created something Orange County had never had before:
The Catalyst Fund: a revolving loan fund designed specifically for small nonprofits.
The need for this fund was well documented in the Samueli Foundation’s Orange County Nonprofit Needs Assessment, which showed that only 25% of regional nonprofits had access to a line of credit or loan.
The Orange County Community Foundation provided early catalytic capital to move the concept from idea to program. The Samueli Foundation invested in both operations and program design. The Sun Family Foundation expanded the fund's lending capacity. OC Grantmakers had long championed the need for working capital within the nonprofit sector, helping cultivate the philanthropic conversation that made the solution possible.
Financial expertise proved equally essential. Two seasoned banking executives volunteered decades of lending experience to design and oversee the underwriting process. AltCap California, an emerging CDFI and mission-based lender, partnered with Charitable Ventures to develop the loan application and servicing platform while providing ongoing technical guidance.
The First Test
CIELO became the fund's first borrower.
Working alongside Charitable Ventures, the organization helped shape an application process intentionally designed to be accessible for smaller nonprofits.
When CIELO applied for a $100,000 bridge loan, repayment was never the question.
The Catalyst Fund approved the loan – and turned the financial stranglehold into breathing room.
The relief was immediate. Not because the loan created the work, but because it gave the reimbursement system time to catch up with work that had already been accomplished.
As Iosefa reflected,
"The loan provided a bridge while we waited. Without it, our cash flow would have put us in a dire financial situation."
Changing How Philanthropy Shares Risk
The first loan is already being repaid on schedule, allowing those dollars to revolve to future borrowers.
New organizations are entering the pipeline.
The fund is growing.
Yet perhaps the greatest challenge has not been launching the fund. It will be changing the long-held assumptions about nonprofit finance.
For generations, nonprofit leaders have been taught that debt signals weakness. Traditional lenders often struggle to understand reimbursement-based funding models, while nonprofit boards have understandably viewed borrowing with caution.
The Catalyst Fund offers a different perspective.
When used responsibly, working capital is not a sign of financial distress. It is a tool that allows healthy organizations to continue serving their communities while waiting for committed revenue to arrive.
That distinction matters.
The fund was never intended to encourage borrowing for its own sake. Responsible lending sometimes means helping an organization strengthen its financial position before approving a loan. Every application is reviewed with both financial discipline and deep understanding of nonprofit operations.
Each loan includes financial coaching, cash-flow forecasting, budget support, contract readiness, and ongoing technical assistance, helping nonprofit leaders build stronger financial practices while preparing them for future relationships with community lenders and financial institutions.
By pairing capital with coaching and technical assistance, the Catalyst Fund strengthens both today’s operations and tomorrow’s financial resilience.
Building the Financial Infrastructure Nonprofits Deserve
The Catalyst Fund is more than a revolving loan program. It represents a new way of thinking about philanthropy. Rather than asking nonprofits to shoulder all of the financial risk created by delayed funding, it invites philanthropy to jointly share that responsibility.
It recognizes that organizations closest to community need have already demonstrated their resilience. What they often need is not rescuing. They need access to capital that reflects how nonprofit funding actually works.
The first loan did more than help CIELO navigate a temporary cash-flow gap.
It demonstrated that a nonprofit's timing challenge does not have to become a community's crisis.
That is the vision behind the Catalyst Fund.
Charitable Ventures and its partners are now building toward a $2 million revolving fund capable of supporting 15 to 20 nonprofit loans each year.
Their aspirations extend well beyond providing small loans:
To create an Orange County where access to working capital is considered essential nonprofit infrastructure; where organizations spend less time worrying about the timing of reimbursement and more time serving their communities; and where philanthropic dollars generate impact again and again by revolving from one mission-driven organization to the next.
Because the greatest innovation is not the loan itself.
It is the belief that when philanthropy shares risk alongside nonprofit leaders, communities become stronger.
