Kevin Price grew up with the belief that he could change the world.
As a young man, Kevin founded a nonprofit and, over the course of three years, was on the way to building an innovative crowdfunding program to serve the homeless population of Austin, TX. That was, until his world flipped upside down.
What Began As A Passion Ended In His Personal Bankruptcy
It all began with Kevin's commitment to positive community impact. Unfortunately, it ended with a personal financial disaster. Here's his story...
Things seemed to be coming together at his nonprofit start-up. He had some initial funding, a solid team and the community support to make a difference. To avoid commingling personal and business finances, he decided to open separate, but personally guaranteed, credit card accounts with several banks. This is nothing new. Credit card companies are reluctant to provide nonprofits with credit cards, and lines of credit, without the guarantee of a credit worthy individual. Many nonprofit executives take on this risk, simply to provide the "wiggle room" that a credit line affords; that extra month while awaiting a grant payment or third-party reimbursement (when important, time-sensitive purchases need to be made).
In Kevin's case, those additional lines of credit allowed his new nonprofit to expand services and begin building out a robust crowdfunding platform to provide financial support to address homelessness in his community.
His organization also had challenges: being a young organization made it more difficult to qualify for grants and they needed time to build a network to garner larger donations.
Financial Disaster Strikes
After three years in operation and despite their best efforts, the nonprofit's funding had dwindled to the point that they were struggling to cover operating costs. At that point, they had also maxed out those personally guaranteed credit cards and no longer had funds coming in to pay them off.
Kevin quickly learned that high interest rates resulted in mounting payments due, making it impossible to erase the original credit card debt. He simply could not keep up the monthly installments as well as cover his own critical living expenses. With his back against the wall, he was forced into personal bankruptcy.
The Cost of Recovery
This bankruptcy will follow Kevin for the next seven years. His now poor credit rating will render him ineligible to finance a house or a car, open a line of credit, rent an apartment or in some cases land a job. He had set out to make a positive social change, but because of his lack of financial knowledge about credit card debt, his personal life has been severely impacted. The stress from the bankruptcy drove Kevin into a deep depression for over a year.
What Kevin Says About Charity Charge Credit Card for Nonprofits
When I heard about Charity Charge, I had to tell my story. Charity Charge is a socially responsible Public Benefit Corporation that is dedicated to reducing credit card-related debt and risk for nonprofit employees and increasing the financial security of nonprofits across the nation. And Charity Charge is backed by a trusted credit card company: Mastercard, a global pioneer in payment innovation and technology connecting billions of consumers, issuers, merchants, governments, businesses and nonprofits.
Charity Charge is on a mission to reduce personal liability while helping nonprofits to build their own credit history and provide alternative streams of revenue: it sounded too good to be true. But that is exactly what Charity Charge provides to nonprofits.
I hope that your take-away from my story is: Don’t be like me, avoid personal guarantees on your nonprofit accounts!