WHAT IS ENTERPRISE CAPITAL (EC)?

A paradigm for philanthropic funding that embraces long-term, flexible capital as the “high-value” fuel necessary for nonprofit organizations to fulfill their social and economic missions. Also called “philanthropic equity” or “net asset grants,” it constitutes any form of long-term, unrestricted funding that targets an organization’s balance sheet rather than its income statement.

 

One of its foremost practitioners, Antony Bugg-Levine, CEO of the Nonprofit Finance Fund, describes enterprise capital as “a form of grantmaking in which the purpose is to enable an organization to become stronger and more sustainable, as opposed to a lot of other grants whose purpose is to enable an organization to deliver social value in the short-term.”

 

At the heart of the case for enterprise capital (EC) lies the golden rule of finance: financial strength comes from the ability to match sources and uses of funds. While time-restricted grants make sense for supporting short-term needs, organizations must also have access to multi-year capital that supports long-term vision and strategy.