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This fundraiser ended on 03/15/11

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The Capital Good Fund is a non-profit microlender whose mission is to create a poverty-free, inclusive green economy through innovative microfinance. It provides loans, workshops and consulting services to disenfranchised entrepreneurs.

 Our mission is to create a poverty-free, inclusive green economy through innovative microfinance.

Strategy

To achieve our vision of a poverty-free, inclusive green economy, we employ the tool of microfinance—the provision of small, affordable loans and technical assistance to individuals unable to access credit through traditional sources. We provide loans for micro and small businesses, U.S. Citizenship, and green credit building.


Small Business

Our small business loan program targets low and moderate-income entrepreneurs that want to start or expand small businesses. The loans of $500-$3,000 come with technical assistance that enable the borrower to incorporate environmentally sustainable practices, such as recycling and the use of high-efficiency light bulbs, into their businesses. We also target what we call “green collar entrepreneurs”—individuals from the same target population who want to start green businesses, including landscaping, cleaning and weatherization companies. In addition, we work with the borrowers to identify better ways of marketing and pricing their products and services, and in generally growing their businesses in a way that is beneficial to them, their clients and the environment.


CGF’s Green Business Loans are an innovative way to help our borrowers take part in a truly inclusive, upwardly mobile green economy. The diagram below highlights the three primary outcomes of this loan type:

 

1. Earn Money-Greening one’s business often opens up doors to new markets and customers that are interested in taking part in activities that not only serve a practicaly purposes, but minimize environmental impact in the process. Our business borrowers, then, significantly expand their target market and potential customers by making their own businesses more environmentally friendly.


2. Save Money-An environmentally friendly business does not only reduce environmental degradation—In many cases, it puts money directly back into the pocket of the business owner. Reducing energy costs and substituting expensive materials for sustainable, reusable products saves borrowers a tremendous amount of money and ultimately magnifies the business’s bottom line.

3. Best Practices-At the heart of CGF’s green lending is environmental awareness that we wish to raise in our communities. By requiring no or low-cost best practices for businesses, such as recycling and safe product use, our borrowers implement changes in the ways they run their businesses and maintain their households that make it easier for them to earn more and save money.


U.S. Citizenship

After extensive conversations and focus groups with the community of Providence, Rhode Island, we identified a tremendous need for loans that cover the cost of applying for United States Citizenship. Though the fees are always increasing, at present the US government charges a $675 application fee, and the International Institute of Rhode Island charges $200 for legal representation and guidance throughout the process. We realized that one of the most powerful way to create a poverty-free, inclusive green economy in the United States is to help immigrants become citizens so that they can more meaningfully engage in US society by voting and receive additional benefits such as easier access to financial aid. We work with our citizenship borrowers on financial and environmental empowerment—ensuring that they become citizens that understand the financial system, and have the tools to understand and take action on the environment issues that matter to them.


Green Credit Building

Living in the U.S. without a credit score or with a poor credit score makes it that much harder to raise one’s standard of living. This is because credit is essential to securing a credit card, purchasing a house, etc. At the same time, lower-income families spend 17% of their income on energy bills, compared with 4% for higher-income households, meaning that their money is literally being sucked out the leaky windows and poorly insulated walls and doors. This has repercussions for the family, America’s security and the environment. Capital Good Fund is developing the first loan product designed to simultaneously increase a borrower’s credit score while at the same time reducing their energy bills. This $100 green credit builder loan will finance the cost of installing a programmable thermostat—which can reduce energy bills by 5%-15%. As borrowers make repayments they will begin to build their credit. A $100 loan, paid back over 6 months to a year, can serve as an essential first step to building credit!


Founding Principles

The Capital Good Fund was founded based on the following core principles:

We are borrower-centric
Everything we do is tailored toward meeting the needs of our borrowers so that both they and their communities benefit from our products and services.

We believe in the entrepreneurial spirit of our borrowers.
The beauty of microfinance is that it assumes the best about people; that with a small loan and some targeted technical assistance, anyone can improve their lives and the lives of their family and community. We believe strongly that our affordable loans, combined with the technical assistance provided through our partners, will enable our borrowers to unleash their entrepreneurial spirit, raise income levels, and lead to numerous other benefits.

We are driven by innovation
Over the last 30 years microfinance has repeatedly proven itself to be an effective tool for fighting poverty and fostering economic development from the bottom-up. The challenge now is not to demonstrate that microfinance works, but rather to come up with ways of making it more efficient and effective, and innovating around new products and services and ways of delivering those products and services. We are dedicated to making use of new hardware and software to streamline our operations and better serve our clients. In addition, we are passionate about designing new products, such as loans that cover the up-front cost of applying for citizenship, or loans that finance 100% of the cost of doing a home weatherization.

We want to change the way banking is done in America
The Capital Good Fund was founded during a time in which many Americans were experiencing a credit crisis due to a banking crisis and a severe economic downturn. However, America’s working poor are always in a credit crisis due, in part, to a financial system that has left 100 million Americans either under banked or unbanked. We want to create a new model for doing banking—one that is inclusive and beneficial to people, communities and the planet.

We take an “open-source” approach to everything we do
We want to learn from the successes and failures of other organizations, and vice versa. To foster that interaction, we intend to take an open, transparent approach to everything we do, sharing what works and what doesn’t, and collaborating with others to better serve our borrowers. Our goal is not to develop proprietary lending models or loan products, but rather to make available to anyone and everyone information about our programs so that more people in more places can benefit from innovations in microfinance.

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