The Association for Enterprise Opportunity in Arlington, Va., has a distinct mission: helping owners of the smallest businesses build credit histories, so they can qualify for traditional bank loans.
But like many nonprofits, the association's budget is tight, according to Bill Edwards, its executive director, so the $17,000 it received from an arm of the $1.8 billion-asset ShoreBank Corp. in Chicago made a big difference.
The money "covers some of our staff time, so we can dedicate some staff" to creating a reporting system with the credit bureaus, Mr. Edwards said. It will also cover the cost of travel to meetings with bureaus.
The association was one of five nonprofits to receive grants worth a total of $375,000 this week from ShoreBank's Center for Financial Services Innovation.
ShoreBank created the center last year. Since then it has given grants to nonprofits that help low-income people build assets.
Arjan Schutte, the center's associate director, said its mission is to award grants for work that provides lessons to the entire industry on reaching low-income populations profitably.
The $17,000 is part of a joint $115,000 grant to the association and the Central Vermont Community Action Council Inc., an anti-poverty nonprofit, to help microlenders report to credit bureaus. A $50,000 grant went to the Appleseed Foundation, a Washington consumer advocacy group, to help it study the exchange rate markup charged when people send money abroad.
The Urban Insurance Partners Institute, a Chicago nonprofit that works with insurance companies to help them expand their coverage, received a $60,000 challenge grant to test a new underwriting method for urban markets.
The fourth grant, worth $150,000, went to the Center for Community Change, in Washington, which is researching ways for low-income workers to use stored-value cards to help low income workers manage their money.
Mr. Schutte said the winners were chosen from roughly 100 applicants because they best demonstrated innovative uses of products or services.
For example, Suzanne Reade, the president of the insurance institute, said it wants its underwriting method to change how insurance companies write policies in urban markets. If insurance companies can "find a tool to let them assess risk more accurately, they can serve wider variety of consumers," Ms. Reade said.
Urban populations are more diverse than suburban or rural ones, so it is harder for insurance companies to assess risk, she said.
The institute's grant requires it to find matching funds from insurance companies this month. Mr. Schutte said the matching funds will ensure that the industry is interested in the institute's efforts.
