Meals on Wheels and the Power of NMTCs: A Client Testimonial

TREVOR NELSON: Welcome back to Cherry Bekaert’s Tax Service Podcast. I am Trevor Nelson, the manager with our Strategic Financing Services team.

Today we will be diving into what makes a successful New Markets Tax Credit closing through our featured guest, the leadership team of Meals on Wheels of Greenville. I will pass it over to our guest to introduce herself and tell us more about the organization.

KATRINA CARILE: Thanks, Trevor, for having me. I am Katrina Carile, Executive Director of Meals on Wheels.

I joined the team in 2009 as Director of Development and currently serve as Executive Director. I oversee strategic planning, budgeting operations, and the vision for the organization.

For those unfamiliar with our program, Meals on Wheels of Greenville has been delivering nutritious meals to homebound seniors since 1968. Our mission is to enhance the quality of life for seniors and others with limited mobility, whether from physical or mental limitations.

We provide meals that meet their dietary needs while offering social interaction to help impact the loneliness and isolation many face in their homes. We are able to do our work because we have a dedicated network of volunteers and donors.

This allows us to deliver over 1,500 meals each day to our clients. Beyond the meal, our volunteers are critical because they provide a friendly visit, often being the only contact our clients see during the day.

They are the lifeline between our clients and the work we are doing to allow them to stay in their homes with independence and dignity.

TREVOR NELSON: Absolutely. We have heard that time and time again regarding aging with dignity, and I think that is such impactful work.

The exciting thing is you have been carrying this vision for some time and are now in the midst of a major expansion. Can you tell us more about what you have going on now and what the future holds?

KATRINA CARILE: We are at an exciting time for Meals on Wheels of Greenville. In 2023, we purchased a two-and-a-half-acre property about a mile and a half from our current location at 3905 Augusta Road.

It was previously the site of an Economy Inn hotel. This is a full-circle moment because we actually used to deliver meals to individuals at that hotel when I first started. In some ways, we feel like we are coming home.

We are going from 9,500 square feet to 25,000 square feet. This will allow us to make a bigger impact for our clients and the community.

The facility will have over 15,000 square feet of kitchen space, which is needed as we see a greater demand. It will allow us to triple our current production up to 6,000 meals a day if needed.

This means we can serve more people while allowing for the same quality of meals and care. We are also adding almost 10,000 square feet of office space.

Currently, we do not have a place for all of our office staff to sit in a setting conducive to what they need to do. Our client services team needs to respect the privacy of our clients, volunteers, and donors.

We also want a gathering place for our board, staff, and community partners to meet. Food storage is also going to be increased compared to our current capacity, up to about 5,000 square feet.

This will allow us to take advantage of bulk purchasing and maintain better financial stewardship by keeping costs as low as possible. The best thing about this new facility is the conversation it started.

It is not just about what we need today, but what our organization and community need for the future. The property allows for growth, with room for one or two more buildings.

It is unique, especially for a nonprofit, to build a new building while still having room for growth that we haven't even fully decided on yet.

TREVOR NELSON: That is absolutely incredible. To give the audience context, you are currently in a residential neighborhood in a former house.

I want to commend the efforts you have done to date and express how excited we are about the project. You were able to leverage the New Markets Tax Credit.

Before I let you talk about the process, I want to orient the audience to what happened. The New Markets Tax Credit is a federal program that offers a 39% tax credit that is monetized by various investors.

In this instance, Capital One, a national bank, provided the monetization of the tax credits. Cherry Bekaert’s related Community Development Entity, the governing organization of the New Markets Tax Credit, provided the allocation.

It is great to see how all these parties, some with a national footprint and The Innovate Fund with a regional footprint, converged to support Meals on Wheels of Greenville.

Kat, tell us about your process with the New Markets Tax Credit, how you became aware of it, and what guidance you would give sponsors considering this path.

KATRINA CARILE: As we were preparing to build this new facility, we entered into a capital campaign. With the help of our campaign consultant, we conducted community interviews.

Through follow-up meetings, a couple of people mentioned the New Markets Tax Credit. One individual in the financial world helped me start to understand it better and provided research resources.

I started having calls with different groups. Trevor, you were one of the first conversations I had as I tried to get a handle on it.

Meals on Wheels of Greenville had never been involved in this before. Our funding structure has always been through philanthropic dollars or earned revenue.

When a nonprofit starts looking at tax credits and monetization, it is often outside of its wheelhouse. We started with many conversations with people we knew, peers who had looked into it, and respected members of the community.

Partnerships are important to us. We look for people who align with our goals and vision.

One thing we do well is delivering meals in the community, but we look for people more knowledgeable in different areas to partner with, whether it is accounting or IT.

We took that same approach with the New Markets Tax Credit. We worked with Trevor and his team at Cherry Bekaert, as well as our legal counsel.

This is your daily work, so you know this process. I heard from several people that you cannot do this on your own, and thankfully, I took that to heart because it is 100% true.

Beyond the scope of work, you need a true understanding and due diligence. You really have to have a trusting relationship and experienced partners around you.

Secondly, it has helped us share the message about our project. We have a $13 million campaign, and we knew going in that we would need different types of funding.

While Greenville is a tremendously generous community, that is a huge goal for a health and human service organization. We knew we had to look at non-philanthropic opportunities for revenue.

While the funds provide a huge impact on our ability, it is really about the long term for us. We want to ensure that the work we are talking about continues.

We take the controls and standards of operating as a nonprofit very seriously because people are donating their time and financial resources. This process fell in line with that responsibility.

TREVOR NELSON: Absolutely. That speaks to the organization's ability to adapt and stretch outside of the box, which is the ethos of the New Markets program.

Before we get into the closing process, I want to give the audience some context. We had ambitions of securing roughly $2 million of net new cash for Meals on Wheels to help achieve this $13 million vision.

We were successful in doing that with New Markets. However, true to the spirit of the trusted advisor approach we have at Cherry Bekaert, we also advised on a South Carolina state program, the Abandoned Building Credit.

That enacted another $600,000 to $700,000 when all is said and done. We were able to exceed our target of non-philanthropic cash through these various tax credit programs.

Kat, talk about what you experienced through the closing process, how sponsors can prepare, and any surprises you encountered.

KATRINA CARILE: Trevor, you hit the nail on the head regarding the investment from the New Markets Tax Credit and the Abandoned Building Credit.

We have a $13 million goal, and we announced recently that we have surpassed the $11 million mark. We would not be at that point without the work through these programs.

The process has been a huge part of our campaign and this project. Regarding the closing, I have thought a lot about what I wish I knew.

It is important to understand the process as much as possible. It is very different from the day-to-day work we do.

The communication piece is also critical to ensure everyone is on the same page. Things come up where you have to shift, be flexible, or adapt.

You must ensure you have the necessary team. As Executive Director, I was thankful to have our Executive Project Manager, who is incredibly detailed.

We were tag-teaming, but she handled the majority of the communication with vendors and information collection. You need a strong team within the organization because it cannot be just one person.

You still have to get your day-to-day job and the campaign done. Documentation is also critical.

We brought in our outside accountant. While we brought them in at a good time, they probably would have loved to have been involved even earlier.

Our outside accountant handles all of our reporting for the board and works with our auditors. That is a critical component.

You also need someone to be that champion or quarterback who knows the process. Trevor was that person to help navigate the weekly calls and the closing.

That is very important for anyone thinking about this. You must consider not just your internal team, but what your external team looks like.

TREVOR NELSON: That all makes sense and is phenomenal feedback for future sponsors. As we wrap up, are there any last thoughts about the program?

You are now in the compliance period. Do you have any parting thoughts on finding success after closing or on the New Markets Tax Credit experience broadly?

KATRINA CARILE: It has helped us become more data-driven. We want to show the impact of the work we do with this new facility, not just through stories, but through numbers.

As things continue to change, showing the impact and how we are moving the needle will be critical.

TREVOR NELSON: One of the nice things about the program is that, through all the complexities, it ensures those procedures and documentation are in place.

Hopefully, that serves as a blueprint not only for the New Markets transaction but for the organization on a go-forward basis.

I want to thank Kat and the full Meals on Wheels team, alongside all the other financing and philanthropic partners who made this possible.

If you are in the Upstate in South Carolina, I highly suggest you spend some time with our friends at Meals on Wheels of Greenville.

Thanks to everyone for tuning in. If you are interested in learning more about how the New Markets Tax Credit could support your community-focused project, reach out to us at Cherry Bekaert.

Stay tuned for the next episode where we will explore more stories of strategic financing driving real impact. Until then, I'm Trevor Nelson, and I hope you found this useful.