How Mission-Related Investments Work

Each year the Ford Foundation puts at least 5%
of our endowment toward efforts to reduce
inequality around the world through our grant making
and program-related investments. The rest of the endowment
is carefully managed to create the financial
returns that are necessary to continue our grant making
well into the future. As a philanthropic organization, we are always exploring
how we can put more of our assets toward reducing inequality. This is where mission-related
investments come in. Over a period of 10 years, the Ford Foundation is committing up to $1 billion of our endowment to mission-related investments— a start toward using more
of our assets for social impact. MRIs are investments made
with two goals in mind: They aim to promote
long-term social impact through promoting things
like quality education, a healthy environment, and economic equality. And, they seek
attractive financial returns. The Ford Foundation
might invest in a fund that seeks to preserve
affordable housing for low-income families
in the United States. Over time, through
capital improvements and efficiencies
created at the properties, and through rent revenues, the fund will generate a financial return
for its investors. Or, in developing countries, the Ford Foundation
might invest in a fund that develops and provides safe
and affordable financial products and services to the underserved. This would help
promote financial inclusion, and the foundation
would receive returns when the fund’s underlying
portfolio companies repay their investments. The Ford Foundation is excited to join this growing movement and encourages others
to use the power of the market to create lasting impact
around the world.

Paul Whisler

Leave a Reply

Your email address will not be published. Required fields are marked *