Borrowing with Purpose: Justifying Loans for Nonprofit Goals

ARTICLE | October 01, 2025

Debt has often been a sensitive topic for nonprofits. Many see borrowing as an unnecessary risk—perhaps even contrary to their mission. Yet, in today’s financial landscape, a growing number of nonprofit organizations are adding debt to their strategic toolkit. When handled properly, a loan can serve as a bridge that connects a nonprofit’s ambitions with the necessary resources to bring them to life. From funding a major facility renovation to smoothing out seasonal cash flow, borrowing can be justified when it aligns with an organization’s plans and values. This article explores how debt can be used responsibly, what factors to consider before applying for a loan, and how to communicate these financial decisions to stakeholders.

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