The Risk of Debt in Financing Nonprofit Facilities

Why Your Business Model Matters

A ground-breaking project, this study examines the phenomenal rise in the use of debt in the nonprofit sector in the early 2000s, looking specifically at arts organizations, human service providers and private schools. The way that debt influences an organization — both positively and negatively — hinges on its business model and its mix of earned and contributed income. The report clarifies the role of lenders and borrowers in the transaction, and includes guidelines on debt use and risk tolerance that are based on the combined wisdom of dozens of organizations, lenders and intermediaries.

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