Friday, race begins to tap $350 billion in federal stimulus loans. Nonprofits eligible. Great news, right? Not if it actually make things worse for vulnerable nonprofits. TL;DR every nonprofit (<500 employees) should apply Friday for a PPP loan; no 1 should rely on getting one 1/

How can $350 billion be a bad thing? B/c it’s generating a frenzy of false hope that is distracting nonprofits and funders and leading some to keep spending more than they can b/c they anticipate getting loans (that turn into grants) that likely will not come. 2/

Was it a victory for nonprofits to be included in the legislation? Sure, but these loans will flow through a system of lenders that is geared to supporting small businesses. And demand from business will easily be enough to use all the $$ 3/

On Friday, these lenders will race to get loans done so they can get paid by SBA before the $$ runs out. You’re a lender: who do you lend to first? Business you already know who needs $20MM? Or the nonprofit you don’t know that needs $500,000? (You’re paid % of total loan) 4/

Some nonprofits, w/strong relationships w/banks who also work with @SBAgov, will probably get close enough to front of the line to get funding. Most will not. And, no prize to figure out who is going to be left behind (smaller, POC-led orgs serving more marginalized groups) 5/

In the meantime, nonprofit leaders who need to make brutally tough choices to cut costs to survive are holding false hope program will save them, frantically trying to understand a program not meant for them. And there’s a frenzy among well-intentioned foundations to help. 6/

What do we need? A stimulus for nonprofits that does not try to use the small business loan system to reach them. Or at least an explicit carve out of the next round of funding to give us a shot.
More coming Thursday on https://nff.org/covid-19-tools-and-resources-nonprofits END

Please talk me down and tell me I'm missing something @LettieriDC @bethbaff @EllisCarr2

Tomorrow, $350 billion becomes available for small business and nonprofit loans (that turn into grants). Nonprofit leaders, will you