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NEXT Seed Capital Award

In 2016, the NEXT Seed Capital Award offers $100,000 unrestricted grants to CDFIs with a promising idea for expanding coverage in consumer finance.

Applicants might be in various stages of development of their consumer finance strategies and should demonstrate a need for a grant to help develop or expand a promising strategy. The expansion strategy should be on track to implement within twelve months of receiving an award. There is no minimum asset size for applicants.

Congratulations to the NEXT Seed Capital Awardees: Lower Valley Credit Union, The Housing Fund, and Texas Community Capital. Read more about Awardees.

2016 Schedule

Applications Open: January 21

Information Calls for Applicants: January 27, 2016, 1:00–2:00 PM ET

Applications Close: March 2, 5:00 PM EDT

Evaluation Period: March-July

Selection Committee Call with Finalists: July 12, 2016

Awardees Notified: July

Visibility Campaign: August-October

Wells Fargo NEXT Awards Celebration: October 25, 2016 at OFN's Annual Conference in Atlanta, GA

Applicants for the NEXT Seed Capital Award must meet certain eligibility requirements. See the detailed application guidelines.

General Notes

  • CDFIs do not need to be a Member of OFN to apply for the NEXT Awards.
  • CDFIs cannot apply for both the NEXT Seed Capital Award and the NEXT Opportunity Award in the same year as they require different stages of development for an applicant’s expansion strategy.
  • The CDFIs that won multi-million dollar Awards in 2007–2015 may not apply for the Wells Fargo NEXT Awards through 2016.
  • CDFIs that are awarded the NEXT Seed Capital Award in one year may apply in future years for the NEXT Opportunity Award.

2016 Eligibility Requirements

  1. Charitable Purpose
    Applicant is a US tax-exempt organization with a current 501(c)(3) determination letter from the Internal Revenue Service. An organization without this tax status may be eligible if it is a U.S. Treasury CDFI Fund certified CDFI. Native CDFIs that are CDFI Fund certified must not be tribally controlled.
  2. Community Development Mission & Impact
    Applicant has a primary mission of community development and strives to have a positive impact on low-income, low-wealth, and other disadvantaged people and communities.
  3. Finance-based Strategy
    Applicant is a private non-governmental financial intermediary that uses financing as an integral part of its community development strategy.
  4. Discipline and Performance
    Applicant is currently in compliance with all financial covenants, reporting requirements, and performance obligations stipulated by public, private, and philanthropic providers of capital and grant support.
  5. OFN’s Goals
    Applicant affirms Opportunity Finance Network’s goal to ensure that low-income, low-wealth and other disadvantaged people and communities have access to affordable, responsible financial products and services.

2016 Selection Criteria

Successful candidates for the NEXT Seed Capital Award or NEXT Seed Capital Award for Savings Innovation will have a compelling plan to start or expand an innovative consumer finance strategy.

Eligible applicants will be evaluated according to the six criteria below.

  1. Rationale for Expansion
    A clear description and analysis of the unmet market need that applicant plans to address with a consumer finance strategy, including why current sources of capital are not providing the unmet market need.
  2. Coverage Strategy
    A compelling strategy to expand affordable and responsible consumer financial products and services. Please note that the consumer financial services strategies can have a financing component, but that is not a requirement to apply for either category of Seed Capital Award in 2015.
  3. Use of Funds
    A compelling use of funds that demonstrates how the applicant will use the NEXT Seed Capital Award to advance the applicant’s coverage strategy in ways that otherwise would not be possible.
  4. Impact
    A solid track record of tracking impact and outcomes over the applicant’s history and an articulation of how applicant plans to develop projections for outcomes/impacts of the proposed strategy.
  5. Readiness
    A clear articulation of any resources (e.g. staff, financial, partners, capital) the applicant anticipates needing to implement its strategy, and how the organization plans to obtain the resources.
  6. Financial Strength and Performance
    Acceptable financial performance and risk management, and a sound business model that positions the organization for sustained growth, innovation, and success.
     

    In evaluating strategies against the criteria above, the NEXT Awards will prioritize strategies that incorporate one or more of the following: innovation, replicability, scalability, and consumer savings. See the detailed application guidelines for more information.

2016 NEXT Seed Capital Award Committee

Allison Clark
Associate Director, Program Related Investments
MacArthur Foundation

Kim Dempsey
Deputy Director
The Kresge Foundation

Sameera Fazili
Consultant and Former White House Policy Advisor

Corinne Florek, OP
Executive Director
RCIF

Kimberly Ostrowski
Senior Program Director, Corporate Giving
Prudential Foundation

Romy Parzick
Senior Manager of Customer Impact
NetSpend Corporation

Fran A. Lutz
Interim Chief Executive Officer
Opportunity Finance Network

Megan Teare
Senior Vice President
Wells Fargo

Can loans to microenterprise and small businesses count under the definition of consumer financial services, particularly if they are helping these businesses move away from high-cost, online payday lenders that lack transparency and can trap small businesses in a cycle of debt?
In general, loans to microenterprise and small businesses cannot count under the definition of consumer financial services. The only potential exceptions are if the loan product or strategy has the intent of helping consumers manage their individual or family expenses and/or liquidity, or if the product or strategy has broader applicability to consumers (that are not seeking small business loans) to help them manage their expenses and/or liquidity.

Can I apply for a NEXT Opportunity and NEXT Seed Capital Award?
CDFIs cannot apply for both the NEXT Seed Capital Award and the NEXT Opportunity Award in the same year as they require different stages of development for an applicant’s expansion strategy.

Can the $100,000 grant for the NEXT Seed Capital Award be used for lending or loan loss reserves?
The grant is unrestricted so it can be used for these purposes, but the use of funds must further your coverage strategy.

Does my organization have to be a 501(c)(3) to apply?
An organization must be tax-exempt under Section 501(c)(3) of the Internal Revenue Service code or certified by theCDFI Fund to be eligible to apply for a Wells Fargo NEXT Award.

My CDFI won a million dollar NEXT Award. Are we eligible to apply for the NEXT Opportunity or NEXT Seed Capital Award?
The CDFIs that won a multi-million dollar NEXT Awards in 2007–2015 may not apply for the NEXT Awards through 2016. CDFIs that won a smaller award are eligible to apply for the NEXT Opportunity Award.

Can CDFIs submit a co-application with another CDFI?
CDFIs cannot submit a co-application. One CDFI must apply and if applying for the NEXT Opportunity Award must have assets greater than $5 million. However, a CDFI can mention in its proposal how it plans to partner with another CDFI in its CDFI coverage strategy.

We are a financial capabilities nonprofit that works with community credit unions. Could we apply with a credit union partner for the NEXT Awards?
An organization needs to be a CDFI to apply. A CDFI cannot submit a co-application. However, a CDFI can mention in its proposal how it plans to partner with another CDFI or non-CDFI in its coverage strategy.

If an organization doesn’t have audited financials, can it still apply for the NEXT Awards?
For the NEXT Seed Capital Award NCUA 5300 financial reports will be accepted, but all CDFI loan funds must provide audited financials statements.

If my organization receives an award, will I be notified before the OFN Conference?
Yes, Awardees for the NEXT Opportunity Award and the Award for the NEXT Seed Capital Award will be notified before the OFN conference.

Is a tribal entity eligible for a Wells Fargo NEXT Award? My organization is an LLC organized under the Tribe.
A Native CDFI is eligible to apply if it is a separate organization from the Tribe and the Tribe does not have any form of control over the CDFI. The Native CDFI must satisfy all other Eligibility Requirements.

Does my organization have to be Aeris-rated to be eligible to apply?
Applicants do not have to be Aeris-rated to apply.

My organization is in the process of being Aeris-rated for the first time. Do I need to provide all of the documents as part of my application?
A CDFI’s final Aeris report must be available by the application deadline or the CDFI must provide all of the requested documents as part of its application.