2018 was a record year for Capital Good Fund. Not only did we grow our loan volume by 50% over 2017—$3 million financed vs. $2 million—but we deepened our market presence in Florida and expanded within Massachusetts. We rolled out a new, lower interest rate on our Emergency Loans (10%, down from 35%). We served a record 150+ Financial Coaching clients and hired a financial coach in Sarasota, Florida. We raised over a million dollars in impact investments and grants and donations. And we did all this while continuing to change lives and maintaining a phenomenal loan repayment rate of 96%.
Yet there is significant room for improvement, and in the mold of New Year’s Resolutions, what follows is a list of my goals for Capital Good Fund in 2019. Many are seemingly insignificant, such as building out our board of directors and empowering staff, but they are the kinds of small goals that, taken together, form the building blocks of an excellent organization. I share them in a spirit of honesty and transparency:
Tell the Good Fund Story
Despite being at the cutting-edge of consumer finance in America—there are very few entities, for-or-nonprofit, that offer our mix of products and services and at our rates—few people know about our innovations. As a result, numerous potential investors, donors, community partners and general supporters never hear about us. The missed opportunities are myriad.
Part of the challenge is that our story is hard to tell: financial services doesn’t have the same immediate appeal as job training, health care, tutoring and other nonprofit models. To succeed in this arena, I will:
- Secure more press outside of Rhode Island through press releases; op-eds and other articles written by me; and radio, tv and print interviews
- Work with our frontline staff to compile more client stories and then with our communications team to package and effectively tell those stories. We did post two fantastic minute-long stories, one about Mamadou and one about Sherlie (immigration and auto loan clients, respectively)
- Send out engaging monthly newsletters and daily social media posts (Facebook, Twitter, LinkedIn and Instagram)
- Write at least two blog posts per month about all manner of topics—strategies for impact, travels, challenges, success stories, etc.
Build Our Board of Directors
In the for profit world, board directors are frequently paid to serve in the role and / or are investors in the firm; they therefore have a vested financial interest in the success of the company. In the nonprofit world, the script is flipped: directors not only serve as volunteers, but they are expected to donate and / or secure donations for the nonprofit, and in fact they are barred from being paid to be on the board. This dynamic creates a fundamental challenge for any not-for-profit entity: as anyone who has worked with volunteers knows, no matter their eagerness to support the mission—and Capital Good Fund’s directors are exceedingly willing to do so—they are always going to be time-constrained as they balance their work and life priorities with their passion for the organization.
In 2019, I seek to add four new directors to our current, wonderful board, bringing the total to 11. More importantly, I will be better at empowering them to oversee the organization. To do this, I will:
- Provide them monthly organizational updates
- Add a second director to the finance committee
- Add a new co-chair who can support our current chair
- Make sure that board meetings are about more than simply receiving updates from me; I want to give directors the space to provide more input and recommendations. This means engaging directors more frequently and more effectively
- Add directors that bring new skills, such as in marketing and communications
Additionally, and this is very much “in the weeds,” I will be more detailed when it comes to getting meeting minutes compiled, approved and signed; tracking board member terms; following Roberts Rules of Order during meetings (things like calling the meeting to order and to adjourn); and sending out materials at least ten days in advance of each meeting.
Empower the Staff
Our team is, in a word, amazing. So amazing, in fact, that I need to empower them to do many of the things I foolishly try to do myself. For instance, I will empower them to:
- Find, recommend, test and refine solutions to problems such as how to streamline processes and acquire more customers
- By providing them with more information about our finances and high-level goals, they will be better able to determine how to allocate resources to achieve the goals; but to do that, I must give them more control over the allocation of resources, for instance by providing a budget with which they can test out marketing and other strategies
- Build and maintain partnerships with social service agencies, immigration attorneys, auto dealers, vendors and other stakeholders
- By giving them data about all aspects of our work—conversation and repayment rates, earned income, loan volume—they can improve their performance and our social impact
Focus on the Right Things
It is so satisfying to take care of emails or other quick and easy tasks—pay a bill, make a follow-up call with a funder, etc. Satisfying to the point that I often end the day having accomplished a lot at the expense of the most important aspects of my job: raising funds, setting a strategic direction, and generally doing the things I’m outlining here. So to ensure success in 2019, I will set and concentrate on the following priorities:
- Raise funds. Part of what’s unique about my job is that in addition to raising money for our operating expenses, I have to also secure the capital we use to make loans. The operating funds come from grants, donations, earned income (primarily interest income) and proceeds from our Direct Public Offering, or DPO. The loan capital comes from loans into our loan fund from banks, credit unions, foundations, family offices, and individuals
- Operating Funds
- Grants and Donations. The goal is to raise $1.3 million
- Proceeds from the DPO. The goal is $1.5 million
- Earned income. The projection is $1.1 million
- Loan Capital. To hit our goal of $5.3 million in loans financed, raise $5 million in new capital (though we actually need less because principal revolves)
- Operating Funds
- Set and execute on our strategy. As new data comes in, I must adjust our priorities and determine how to get back on track
- Leverage data to grow. We use a powerful Customer Relationship Management (CRM) tool called Salesforce. It provides us with mountains of data about our business, so much so that it can be hard to know where to start. But only by using this data to inform our day-to-day operations can we benefit from it. Some of the data points I want to track are:
- Portfolio performance data broken down by a variety of variables such as FICO score, household income, geography, and product line
- Conversation rates from inquiry to application to approval to closing
- What marketing strategies are most cost-effective
- How long it takes to underwrite a loan or process a loan application. I can then use this information to update our scaling projections
- Social impact, such as changes in credit score, debt-to-income ratio, household income, use of banking services and food security
There are I’m sure more goals to achieve, but these strike me as the most important from my vantage point as the CEO: build the board, empower the staff, tell our story, and focus on the right things.
What are your New Year’s resolutions? What do you think about my work goals? (I’ll share my personal goals in a separate post).
Happy New Year!