Community and Economic Development as an Investment-Grade Portfolio: The "Assemblage Model"

Preface: Purpose and Use of Funds;

We will apply monies raised through this pre-development offering to do 3 things;

1. Pay all expenses involved with developing “AND Direct’s ‘Impact SBIC’ organizational requirements and application.”
2. Pay all expenses involved with developing the organizational requirements of the “Credit Union’s Charter Application and Commitments” as well as its brick and mortar establishment.
3. Pay all expenses in the development and marketing of the “Private Placement Memorandum.”

The resulting structure of the Private Placement allows us to mitigate default risk through SBA guarantees. The structure also mitigates unsystematic risk through the sponsored lending institution’s ability to increase the investment funds available through a loan (scale). More investment funds allow for an increased diversification of the portfolio (scope).

The Hypothetical Investment Portfolio

The proposed portfolio that AND Direct (as an "Impact SBIC") and/or the Greater Cleveland Cooperative Federal Credit Union (as a CDFI) would be investing in or lending to will be a diversified set of small businesses within the Education, Communications, Agriculture, Manufacturing, Housing, Energy and Healthcare industries. This mitigates unsystematic risk. To mitigate default risk, these companies must be members of either a cooperative or a trade association which guarantees through executed contracts, pre-purchase of a minimum 80% of each individual company's production or service capacity.

Portfolio Qualifications

Each company, to be considered for inclusion into the investment portfolio must be;

1. A viable company (feasible business, operations, marketing and financial plan),
2. Incorporated and organized as a for-profit entity,
3. Have executed business contracts matching financing requirements, and
4. An active member of and in good standing with a designated cooperative or trade association

Each cooperative or trade association, as an Advisory Board member to AND Direct, and GCCFCU must;

1. Have complete "Sector Coverage," or feasible plan to achieve "Sector Coverage,
2. Have a feasible "Sector Market Plan" based on standard "econometrics,"
3. Have Community Development Entity “CDE-ompliant” Bylaws, and
4. Have executed Member Subscriptions, which include Service Level Agreements (Purchase Agreements)

The Advisory Board as a collective (the presiding Board of NLEH, Inc. through its Executive Director) must deliver to the Fund Sponsor (AND Direct), the following;

1. A complete Marketing Plan for all sectors
2. Commiserate Financing Requirements
3. Updated Operating Agreement or "Collective Agreement" (aggregate Member Subscriptions and Service Level Agreements)

Funding Mechanism(s);

AND Direct will lend to NLEH, Inc, which will lend to the individual cooperatives and trade associations. The cooperatives and trade associations will then issue convertible debt instruments to individual portfolio companies. This funding structure and mechanism mitigates default risk and maintains CDE, SBIC and CDFI missions though community oversight, market analysis and pre-approved econometrics.

Reporting;

All financial and market data will be collected from all parties just-in-time (JIT) or on-demand for reporting to oversight and governing bodies as well as for public records, such as

1. SEC,
2. IRS and the
3. Treasury Department (CDFI compliance)

The financial and market data must be formatted to conform to standard econometric used by the oversight and governing bodies. There will also be available to the public, the economic and community impact outcomes in a format easy to read on the websites of AND Direct, NLEH and GCCFCU under the heading "Impact Reports."

Summary

The purpose of the investment and funding structure is to develop an investment-grade fund that accomplishes on the sponsor's collective mission of community and economic development while delivering to partners and other investors a competitive return.

For Credit Union and Investment Fund Proposal, read plan at http://anddirect.net/services/investments

To donate, go to; http://igg.me/at/8SGY2yZp3CE

Are You A Caring Professional? Please Volunteer Your Time and Expertise To A Great Cause...

NLEH, Inc. and AND Direct, LLC are co-sponsoring the charter of a cooperative bank called The Greater Cleveland Cooperative Federal Credit Union (GCCFCU). This credit union has already received a pre-approval to charter, so we are in the business planning and initial funding stages. Because the credit unions mission is business lending and direct investment in small businesses in low-income and underserved areas, it's lending policies must be commiserate with the respective industry sector markets. This is why we need expert and professionals in these various fields to help the credit union create lending policies based on deep knowledge of the best practices in each industry, so that we can mitigate lending risk and increasing borrower success, by setting reasonable guidelines, requirements and terms. This group of "Subscribers" would also work with  AND Direct, LLC to help construct the "hypothetical investment portfolio" (details HERE), to be filled with qualifying small businesses. 

We are looking for professional in the following industries; Housing (Construction), Energy (Green Alternative), Education (Charter Development and Curricula), Transportation (Multi-modal and Logistics), Banking (Commercial and Investment), Food (Agriculture and Processing) and Manufacturing (Light and Heavy).

To see the duties of the Volunteers we're looking for, click HERE. 

If interested, please sign up HERE.

RECRUITMENT FOR SUBSCRIBERS/BOARD MEMBERS

The Greater Cleveland Cooperative Federal Credit Union

“Subscriber”/Board Member Recruitment and Requirements

Each "Subscriber" has a four-fold duty;

1. To be a part of the team that works on the administrative aspects of the Greater Cleveland Cooperative Federal Credit Union (GCCFCU) chartering process.
2. To build capacity and/or render other technical support to a specific industry, its individual business entrepreneurs through a cooperative entity (which the Subscriber will develop, incorporate.
3. Act as Executive Director for the cooperative entity.
4. In the capacity of Executive Director of his/her specific cooperative, Serve on the Board of Directors for the GCCFCU and on the Advisory Board for the partner Community Development Entities (CDE's) or Small Business Investment Companies (SBIC’s).

1. A "Subscriber" for the purposes of the chartering process of the GCCFCU involves the  following responsibilities;

1. Becoming knowledgeable about credit unions in general and specifically, the mission of the GCCFCU.
2. Working with the NCUA “Organizer” to develop a business, marketing and financial plan.
3. Serving as the ad hoc Board of Director to promote, fundraise and otherwise support the chartering and physical establishment of the GCCFCU and its commencement of operations.
4. To serve initially (or as needed) as managers or other positions in the GCCFCU, until full/part time personnel is put in place.

2. A Subscriber for the purposes of “Capacity-building” involves the following responsibilities;

1. Apply the sector-specific expertise for the mentorship of the member business operators
2. Management training
3. Operational Planning

3. A Subscriber for the purposes of Cooperative Development involves the following responsibilities;

1. Help develop, organize and incorporate, a cooperative entity focusing on the specific industry expertise and serve as the executive director of that newly incorporated entity.
2. Research, create and file appropriate documentation to the appropriate government and business authorities to establish the cooperative entity.
3. Build the Board of Directors
4. Market to and recruit membership.
5. Perform all administrative duties of cooperative entity status compliance.

4. A "Subscriber" for the purposes of Executive Directorship involves the following responsibilities;

1. Must serve on the Board of Directors of the GCCFCU until Low-Income Community (LIC) Representatives replace them per GCCFCU Bylaws, and
2. Must serve on the Advisory Board for any partner Community Development Entity (CDE), CDFI or Small Business Investment Company (SBIC).
1. As a Board Member, each subscriber must;

1. Promote
2. Advise1 and
3. Fundraise (or personally contribute a minimum $10k)
1. As an Advisory1 Board Member, each Subscriber must;
1. Collect (or cause to be collected) market data from its membership
2. Develop (or cause to be developed) market and financial reports
3. Make investment recommendations

“Subscribers,” apart from being “fit2,” should (but not necessarily) have Experience, Skills and Education in the following industries. Based on need and qualifications and interest, a Subscriber will be assigned to 1 of 8 sectors respectively.

I. Food Services

  A. Urban Agriculture

  B. Food Processing

  C. Food Distribution/Retail

II. Health Maintenance Organization

   A. Prevention

   B. Maintenance

   C. Therapeutic

   D. Holistic/Alternative

   E. Billing

III. Communications

    A. Infrastructure (IS)

    B. Software (IT)

    C. Provisioning

IV. Housing

    A. Development

    B. Construction

    C. Management

    D. Financing

V. Banking

   A. Management

   B. Investments

   C. Retail

   D. Commercial

VI. Energy

    A. Systems

    B. Management

    C. Installation

    D. Utility

VII. Education (Head Start thru Post Graduate & Technical)

    A. International Baccalaureate Program

    B. Montessori

    C. Methods (Curriculum)

    D. IEP/Intervention

VIII. Supporting Organization (NLEH, Inc.)

    A. TBD

ALL INTERESTED PARTIES SHOULD CLICK THIS LINK AND FILL OUT THE "SUBSCRIBER FORM” HERE.

(or cut & paste this address into you browser; https://docs.google.com/forms/d/1-GYk7XMD0QaM8sz2tnzvxvp3SswQqnwtWF8M_oyiZ3w/viewform)

So what does a Subscriber get for all this energy, time and monetary investment?

The Subscriber when they become an Executive Director of a cooperative, will earn a commensurate salary ($30-50k/year). The Subscriber will also benefit from the business and community development opportunities their position will offer.

1 Advise: Collect market data and make recommendations to the investment and lending committees of GCCFCU and AND Direct, LLC.

2 Fit: Of good to excellent personal credit-worthiness, no bankruptcies or felonies.

How To Mitigate Investment Risk: Collaboration On Steroids

The structure of our organization, the operational policies, goals and performance metrics are holistic in nature. We combine what current institutions in the community do separately. Our "Assemblage" approach more directly links funding to outcomes and with higher efficiency. This is because we combine a Small Business Investment Company ("Impact SBIC") that has business development expertise, with a Nonprofit organization that has community capacity-building experience, to a portfolio management logic that inherently mitigates unsystematic and default risk, because its construction is geared toward self sustenance as a complete local economy. To that we add a nonprofit cooperative banking institution that lowers the cost of money as it increases the potential scale and scope of the portfolio through its lending capacity. This mutually symbiotic collaboration is based on a strong set of affinity missions, contractual obligations, regulatory compliance and public accountability. We believe this kernel model will change community and economic development nationally and world wide.

Read the complete plan HERE.

A “Hypothetical” Investment Portfolio Construction: For Community and Economic Development

Preface: Purpose and Use of Funds;

We will apply monies raised through this pre-development offering to do 3 things;

1. Pay all expenses involved with developing “AND Direct’s ‘Impact SBIC’ organizational requirements and application.”
2. Pay all expenses involved with developing the organizational requirements of the “Credit Union’s Charter Application and Commitments” as well as its brick and mortar establishment.
3. Pay all expenses in the development and marketing of the “Private Placement Memorandum.”

The resulting structure of the Private Placement allows us to mitigate default risk through SBA guarantees. The structure also mitigates unsystematic risk through the sponsored lending institution’s ability to increase the investment funds available through a loan (scale). More investment funds allow for an increased diversification of the portfolio (scope).

The Hypothetical Investment Portfolio

The proposed portfolio that AND Direct (as an "Impact SBIC") and/or the Greater Cleveland Cooperative Federal Credit Union (as a CDFI) would be investing in or lending to will be a diversified set of small businesses within the Education, Communications, Agriculture, Manufacturing, Housing, Energy and Healthcare industries. This mitigates unsystematic risk. To mitigate default risk, these companies must be members of either a cooperative or a trade association which guarantees through executed contracts, pre-purchase of a minimum 80% of each individual company's production or service capacity.

Portfolio Qualifications

Each company, to be considered for inclusion into the investment portfolio must be;

1. A viable company (feasible business, operations, marketing and financial plan),
2. Incorporated and organized as a for-profit entity,
3. Have executed business contracts matching financing requirements, and
4. An active member of and in good standing with a designated cooperative or trade association

Each cooperative or trade association, as an Advisory Board member to AND Direct, and GCCFCU must;

1. Have complete "Sector Coverage," or feasible plan to achieve "Sector Coverage,
2. Have a feasible "Sector Market Plan" based on standard "econometrics,"
3. Have Community Development Entity “CDE-ompliant” Bylaws, and
4. Have executed Member Subscriptions, which include Service Level Agreements (Purchase Agreements)

The Advisory Board as a collective (the presiding Board of NLEH, Inc. through its Executive Director) must deliver to the Fund Sponsor (AND Direct), the following;

1. A complete Marketing Plan for all sectors
2. Commiserate Financing Requirements
3. Updated Operating Agreement or "Collective Agreement" (aggregate Member Subscriptions and Service Level Agreements)

Funding Mechanism(s);

AND Direct will lend to NLEH, Inc, which will lend to the individual cooperatives and trade associations. The cooperatives and trade associations will then issue convertible debt instruments to individual portfolio companies. This funding structure and mechanism mitigates default risk and maintains CDE, SBIC and CDFI missions though community oversight, market analysis and pre-approved econometrics.

Reporting;

All financial and market data will be collected from all parties just-in-time (JIT) or on-demand for reporting to oversight and governing bodies as well as for public records, such as;

1. SEC,
2. IRS and the
3. Treasury Department (CDFI compliance)

The financial and market data must be formatted to conform to standard econometric used by the oversight and governing bodies. There will also be available to the public, the economic and community impact outcomes in a format easy to read on the websites of AND Direct, NLEH and GCCFCU under the heading "Impact Reports."

Summary

The purpose of the investment and funding structure is to develop an investment-grade fund that accomplishes on the sponsor's collective mission of community and economic development while delivering to partners and other investors a competitive return.

For summary Credit Union and Investment Fund Proposal, read plan at http://anddirect.net/services/investments