Cultivating Fertility Today, for Abundance Tomorrow.
Ensuring the Longevity and Vitality of Community Composting in California
In May 2023, CACC was awarded an incredible $3.08 million from CalRecycle to help promote community composting in California through the Community Composting for Green Spaces II (CCGS-2) grant program. But now we’re facing a huge challenge.
CalRecycle grants can only be accessed through quarterly reimbursements. Every three months, we have to submit our project spending receipts, and 75 days later CalRecycle will reimburse us. This means that in order to launch we needed the first 5 months of project expenses of cash on hand, AND that not all of the projects we select to participate in CCGS-2 can start unless we have enough working capital to back those commitments of support through the entire grant term - which means we also need the last 6 months of cash on hand - or $790,000 to complete the program.
CACC’s Co-Founder and CEO has been exploring many opportunities to meet our funding goals, and was able to garner several short-term loans from nonprofits, and negotiate a grant amendment that included an optional payment for pre-approved CCGS deliverables and estimated costs. We are incredibly grateful for this assistance that helped us launch CCGS-2 programming by July 2023, and maintained our cash flow through June 2024. We estimate that we still need to borrow $200,000 per month during the Summer 2024 in order to support full CCGS-2 program participation through April 2025.
This reimbursement funding problem is not unique to CACC - other not-for-profit organizations who receive public grants have had to forfeit project activities due to lack of capital to spend their full awards. This is systemic economic injustice that impacts community-based organizations across the state, and is especially prominent now with higher interest rates. California’s legislature recently passed a bill that allows up to 25% of future public grant awards to nonprofits to be issued as advance payments in order to address financial equity gaps. But in the meantime, there is a dire need for lending opportunities that empower community composters to expand and scale under current grant programs.
That’s why we’re establishing a revolving Community Loan Fund. We think access to affordable financial resources is imperative to ensure that community composting can continue to flourish statewide. And most importantly, now is a critical time for making investments so that CACC can achieve our full CCGS-2 program impact and benefits.
What’s a revolving Community Loan Fund?
A revolving Community Loan Fund is a short-term lending mechanism that leverages community wealth as a resource towards achieving a community goal. Lenders contribute to the fund at low or no-interest for up to one year. Assets are distributed to support ongoing project operations that directly benefit disadvantaged and low-income communities. At the end of the loan term, the lenders can either receive their money back (possibly with accrued annual interest), or renew their investment for another term.
CACC’s Community Loan Fund
Who can contribute to the Fund?
Anybody that has at least $1,000 to invest for one year in community composting can contribute to our Community Loan Fund. CACC is currently accepting loans from individuals, nonprofits, and businesses, and can offer up to 4% APR on any investment over $10,000. CACC is also accepting any amount of tax-deductible donations to help build the long-term endowment of this revolving fund.
Who does the Fund benefit?
The primary goal of our Community Loan Fund is to create the necessary working capital for CACC to support all community groups selected to participate in CalRecycle’s Community Composting for Green Spaces II program - which is a reimbursement grant. All investments will be used to cover the upfront costs to launch and expand ~40 small compost hubs in low-income communities statewide.
How are Fund investments repaid?
All lenders will be repaid 100% of their initial investment at the end of their loan term unless they voluntarily choose to extend their financial support for another term. For investments that support CCGS-2 projects, repayments will be no earlier than May 2025 and no later than August 2025 after CACC receives reimbursements in full from CalRecycle. Those who contribute more than $10,000 will also have the ability to receive up to 4% accrued annual interest on their investments.
