Our principal strategy to encourage and support transactions is by making grants and loans from funds which we manage in partnership with the participating funders.
The SeaChange-Lodestar Fund for Nonprofit Collaboration was established in 2009 after The Lodestar Foundation approached SeaChange to explore how we might work together. Lodestar, founded and funded by Arizona entrepreneur Jerry Hirsch and led by Lois Savage, has been virtually alone among U.S. Foundations in its longstanding focus on supporting collaboration. The Lodestar Foundation is the fund’s founding and largest donor. SeaChange co-invests alongside Lodestar and manages the day-to-day activities of the fund. The SeaChange-Lodestar Fund makes three types of grants – seed, exploratory, and implementation – to help nonprofits (across the country and in every issue area) cover the one-time out-of-pocket costs that nonprofits incur when exploring or completing a merger, acquisition, joint-venture or other type of formal, long-term collaboration. Since inception, the fund has evaluated more than 400 opportunities and funded more than 110 collaborative transactions. In addition to making grants in support of particular transactions, the SeaChange-Lodestar Fund is active in building the field of nonprofit collaboration by developing and sharing knowledge. To see an internal report on the first few years of our grant-making, click here.
The New York Merger, Acquisition, and Collaboration Fund (“NYMAC”) makes grants to encourage and support mergers, acquisitions, joint-ventures, and others types of formal, long-term collaborations between nonprofits predominantly serving New York City. NYMAC was established in 2012 by SeaChange and a group of initial participants including Altman Foundation, The Booth Ferris Foundation, The Clark Foundation, The Heckscher Foundation for Children, The Lodestar Foundation, The New York Community Trust, and a number of committed and connected New Yorkers. Since inception, the fund has evaluated more than 190 opportunities and funded more than 50 collaborative transactions. All the initial participants have remain involved through NYMAC’s subsequent fund raising rounds in 2014/15 and 2016/17. In addition to making grants, NYMAC is active in building the field of nonprofit collaboration in New York City together with funders, umbrella groups, technical assistance providers, and government agencies. To see the original prospectus for NYMAC click here.
Contact Fund was established by Mark Reed in 2005 to flow capital from socially-motivated individual investors into New York City nonprofits. The Contact Fund makes loans to support the real estate, working capital and expansion capital needs of high-impact nonprofits working on behalf of low-income New Yorkers. The fund seeks to deploy its capital in special situations that require a level of flexibility generally unavailable from conventional lenders. The Contact Fund’s loans range from $100,000 to $600,000, currently bear interest between 5% and 6%, and have a term of four years or less. The underlying investors in are 63 socially-motivated individuals, family foundations and donor advised funds who hold interest-bearing notes issued by the Contact Fund.
The New York Pooled PRI Fund (“NYPRI”) was established in 2014 by Altman Foundation, The Heckscher Foundation for Children, The Thompson Family Foundation, one other private family foundation and SeaChange to collectively source, evaluate, make and manage program-related investments. NYPRI seeks opportunities to help nonprofit organizations increase their impact, while offering the potential for some amount of financial return to investors. Opportunities that are not sensibly funded with grants or conventional, market-rate loans and generally fall into three areas: real estate, working capital, and expansion capital. NYPRI targets investments from $250,000 to $1,000,000 (investments outside this range will be considered on an exceptional basis and/or alongside co-investors) in the form of secured and unsecured loans, loan guarantees, equity, and equity-like securities. The economic terms are determined case-by-case to achieve the programmatic objectives of NYPRI’s participants while remaining below market. In 2017, the JM Kaplan Fund, the Mertz Gilmore Foundation, the Lily Auchincloss Foundation, and the Clark Foundation joined NYPRI.
The Nonprofit Repositioning Fund is a regional effort to encourage and support formal, long-term collaborations between and among nonprofit organizations in Greater Philadelphia. These repositioning collaborations can range from voluntary back-office consolidations to programmatic joint ventures, to mergers and acquisitions. The fund seeks to have a catalytic impact on the capacity, effectiveness, and financial health of the Greater Philadelphia nonprofit sector. The Fund makes grants to nonprofits to identify and engage well-qualified technical assistance (TA) providers who can support the exploration or implementation of a repositioning activity. The fund will support repositioning projects involving nonprofits predominantly serving Bucks, Chester, Delaware, Montgomery, and/or Philadelphia counties. The fund may also consider grants for a local nonprofit to reposition with a national organization, provided that the local presence and service delivery are enhanced in the five-county region. This formal collaboration is an effort to have greater long-term impact through pooled funding.The Nonprofit Repositioning Fund was established in 2016 by founding members including: HealthSpark Foundation, Samuel S. Fels Fund, Scattergood Foundation, The Barra Foundation, The Philadelphia Foundation, United Way of Greater Philadelphia and Southern New Jersey, William Penn Foundation, Lincoln Financial Foundation and The Lodestar Foundation. In rare instances, the Fund will also consider dissolution planning for individual nonprofits (i.e., a dissolution that does not transpire in conjunction with a merger/acquisition).
SeaChange has structured special-purpose philanthropic vehicles (“SPPVs”) to support dissolutions and restructurings, to make impact-investments, and to provide “self-funded” working capital facilities for nonprofits. We will consider any SPPV idea that is consistent with our mission and where SeaChange can play a value-added, intermediary role.
The Catalyst Fund was established in 2008 to facilitate the flow of growth capital into a select group of high-performing nonprofits working in education and youth development with the opportunity, capacity, and ambition to increase their impact significantly. Each multi-year grant made by the Catalyst Fund was leveraged by additional funds arranged by SeaChange. During 2008-2010, the Catalyst Fund arranged four financings totaling $18.0 million: the Impact Fund for the New Teacher Center; the Expansion Fund for UnCommon Schools; the Growth Fund for College Summit, and the Pathways Fund. The Catalyst Fund enjoyed important support from the Bill and Melinda Gates Foundation, SeaChange, and approximately 20 individuals. The last grant made by the Catalyst Fund was completed in 2017