Philanthropic giving is approaching $600 billion annually in the United States, and New Mexicans do their part every year to underwrite the causes that matter most to them. Often overlooked among worthy food bank and animal welfare nonprofits are organizations that promote grass-roots economic development. Nonprofit lenders that offer business assistance — LiftFund, DreamSpring, and others — rely on private giving to support and enable individual entrepreneurship in our state.
Microlenders such as these manage separate pools of private and public money, which they make available as loans and lines of credit to small businesses — especially startup businesses and those in chronically underserved communities and populations. They also support their clients’ success through other services, such as business counseling, training, and mentoring.
Thoughtful contributions — sometimes known as social investments — to any one of these organizations have a way of living indefinitely into the future.
When loans are repaid, for example, the money becomes available to other entrepreneurs who want to start or expand a business. Better yet, clients who obtain a loan from one of these organizations get something more than temporary aid for an urgent need: They get the technical and financial resources and ongoing assistance to become financially independent by turning a talent or idea into a profitable venture.
And when that business buys supplies and services from local vendors — and pays its employees — it injects even more cash into the local community.
Because of this exponential effect, a relatively small donation to a nonprofit lender, especially one that is focused on New Mexico businesses, can snowball into something significant for the state’s economy. It can also attract other contributions, further magnifying the impact.
Social Investing Matters
One example of magnified financial impact can be found at The Loan Fund, a nonprofit Community Development Financial Institution (CDFI).
The Loan Fund was founded by the New Mexico Conference of Churches (along with the Storehouse, Samaritan Counseling Services, Habitat for Humanity, Encino Houses, and Second Harvest), under the guidance of a special task force created in 1987 to address the state’s systemic problem of poverty. At the time, New Mexico was number one nationally in poverty. The task force concluded that entrepreneurship and self-employment opportunities were vital to New Mexico, and increasing access to affordable business loans in underserved and low and moderate-income communities would be a viable economic development tool to combat poverty.
Over the last 30 years, The Loan Fund has made over $108 million in loans to New Mexico’s financially underserved small businesses, entrepreneurs and nonprofits, which have helped create or preserve over 11,500 jobs across the state. This year alone, The Loan Fund will provide more than $6.5 million in new loans to New Mexico small businesses, creating or preserving more than 550 jobs.
Services Give Businesses a Leg Up
According to the 2024 annual report published by the nonprofit lender WESST, more than 30 percent of the organization’s revenue came from private contributions and in-kind donations. The rest came from grants and earned revenue, including interest and loan fees. WESST’s 2024 revenue enabled it to conduct more than 4,200 business consultations that helped 94 businesses launch and create 346 new jobs. WESST services contributed to $65 million in revenues for the companies. Women-led businesses made up 79 percent of WESST’s clients.
As these numbers illustrate, anyone interested in making a social investment in New Mexico might consider organizations like these, which help strengthen local communities one business at a time.