Treasury Bank Organization’s Community Investment Programs CIP is a community investment trust fund in which grantors give money to business merchants and agency as Trading Partners to invest in charitable activities. Most grants are given with no dividends but there is a BIG difference with Treasury Bank’s CIP. Treasury Bank grantors and guarantors expect to get a return on investment by a specified time, usually at below-market interest.
Most U.S. foundations only give grants to 501(c)(3)tax-exempt organizations. CIP can help member clients with low-cost financing for other charitable entities such as social enterprises.
CIP dollars support affordable housing and community development. They also fund capital projects ranging from preserving historic buildings and repairing churches to providing emergency loans to social service agencies and protecting and preserving open space and wildlife habitats.
CIP include grant financing methods commonly associated with banks or other private investors, such as bond obligations. Sometimes Guarantor even make equity investments in charitable organizations or in commercial ventures for charitable purposes.
Characteristics of CIP include the following:
- Of the many thousands of grant-making foundations in the United States, only a small percentage make Investments. In addition, relatively few CIP Guarantor maintain formal CIP or make Family Investments on an annual basis (about one out of three).
- Treasury Bank members make CIP to further some aspect of their charitable mission (e.g., in the areas in which they make grants). CIP are often made to organizations with an established relationship with the grant maker.
- Treasury Bank and members commonly make CIP as a supplement to other existing grant programs when the circumstances of the request suggest an alternative form of financing, when the borrower has the potential for generating income to repay a loan, and as a last resort when an organization in most cases a charitable nonprofit, but occasionally a commercial venture — has been unable to secure financing from traditional sources.
- For the recipient, the primary benefit of CIP is access to capital at a lower rate than may otherwise be available. For the Guarantor, the principal benefit is that the repayment or return of equity can be recycled for another charitable purpose. CIP are valued as a means of leveraging philanthropic dollars.
Compliance
Treasury Bank’s members CIP rules are in compliance with private fund management rules under the private placement, interstate blue sky, crowdfund rules with the Securities and Exchange Commission (SEC) not limited to most regulations and reporting requirements that apply to investment company.
