Community foundations, nonprofit lenders blending strengths

This story is part of a series supported by Northern Initiatives that uplifts equitable small businesses and its ecosystem in Kalamazoo, Battle Creek and Grand Rapids.

Community foundations have found a satisfying way to invest in their communities. They’re investing in nonprofit lenders, who in turn invest in small businesses.

Elissa Sangalli“It’s a great model,” says Elissa Sangalli, president of Northern Initiatives, a Community Development Financial Institution that provides loans and business services throughout Michigan. “Community foundations have the funds and we have the ability to deploy the funds to help small businesses.”

The partnerships between foundations and nonprofit lenders allow both to focus on their strengths, says Janelle Mair, vice president of Community Investment at the Community Foundation for Muskegon County.


“We stay within our area of core competency — strategic grantmaking and investment supports — while supporting small businesses through the CDFI’s skills — supports for businesses that can’t access traditional capital,” she says. 

Northern Initiatives used funds from the foundation’s 2023 investment to help Mari Romero buy a “forever home” for the bakery she has nurtured for 10 years. Yummy Delights by the Lakeshore opened this summer on Hackley Avenue, where Romero is already creating generational wealth. Her daughter Sabrina runs her own cookie business out of Yummy Delights — and both are flourishing.

The foundation’s investment is also providing pre- and post-loan support for many more entrepreneurs with Northern Initiatives’ newly hired West Michigan-based business coach. More than half of them are entrepreneurs of Color.

Investing in a nonprofit that supports small businesses has allowed the Petoskey-Harbor Springs Area Community Foundation to “move one investment from Wall Street to Main Street,” says David (DJ) Jones, executive director.

David (DJ) JonesOne startup, literally on a main street, backs this up. When demand for Harbor Equipment Company's tractor rentals surged, thanks to all that yardwork during the pandemic, Lucas Fitzpatrick and Ric Newbury quickly realized their home-based business far exceeded the space they had at home. Funds from the Petoskey-Harbor Springs Area Community Foundation’s investment helped with a new location, payroll, and operating expenses through the first year.

 “The foundation has once again built up the resiliency of a local business,” says Sangalli. “To be able to help a local small business and use local money to do it is at the heart of our mission.”

Jones is a big proponent of the Program Related Investment (PRI) concept, a tool relatively new to the foundation.  The foundation’s initial investment of $150,000 in 2019 has resulted in $98,000 in Emmet County loans, including Paycheck Protection Program (PPP) loans, like one to Tillie’s Tafel in downtown Petoskey (pictured) that have since been forgiven.

Jim and Patty Dewees of Tillie's Tafel. The bakery received a PPL loan from the Petoskey-Harbor Springs Area Community Foundation.“Our investment is multiplying and we’re recycling it,” Jones says. “Get a small return, give it away again. In this process, we’re building a stronger community, a stronger economy.”

The “program-related” part of the investment is vital too, says Janelle Mair. “Community foundations are a wealth of knowledge on the needs and opportunities in local communities. The place-based focus allows for a deeper understanding of where and how investments can be most impactful; and how donors can work together to create change in a community.”