How our endowment works
Transcript
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The Ford Foundation is the second-largest private foundation in the United States, with an endowment of over $10 billion.
So … what does that mean exactly?
A private foundation is a non-profit organization that makes grants that serve the public good. In Ford’s case, we support visionary leaders and organizations on the frontlines of social change worldwide. We work on a variety of issues, from human rights to sustainable development to freedom of expression.
So it’s like charity?
The Ford Foundation is different from public charities in that we do not take contributions from donors. No fundraising, no pledge drives, no benefit dinners. The Ford Foundation has no income other than the returns on its invested endowment.
Where did that $16 billion come from?
The foundation was established in 1936 with a gift of $25,000 from Edsel Ford. When Edsel and his father, Henry, died in the ’40s, they left the foundation the equivalent of almost $4 billion. Through smart financial management, we’ve grown that into our current $10 billion endowment.
Plus, we’ve invested the equivalent of $54 billion into our work.
How much of the endowment does the foundation spend each year? US tax code specifies that foundations must pay out at least 5% of their assets each year. Ford consistently exceeds that amount, which means that Ford currently spends over half a billion dollars annually to support our mission.
Who’s in charge of that?
It’s up to our investment staff and board to maintain a healthy endowment without exposing it to too much risk. By investing responsibly, we can continue to fund individuals and organizations who are changing our world for the better. Whether they are advocating for the right to a living wage or making award-winning documentaries that advance social justice, we’re supporting open and accountable governance worldwide.
Through careful stewardship of our endowment, we can keep our mission alive for years to come.
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As one of the largest philanthropies in the world, the Ford Foundation makes grants and investments that serve the public good and support visionary leaders on the frontlines of social change. These grants and investments, all funded through our endowment, advance issues like human rights and sustainable development while helping to reimagine philanthropy for the 21st century.
In 1936, Edsel Ford, son of Henry Ford, the founder of the Ford Motor Company, established the Ford Foundation with an initial gift of $25,000. When he and his father died, they left the foundation with the equivalent of $4 billion. That original investment has since grown, now sitting at around $16 billion. It’s a figure that changes depending on the management of the endowment. This is what makes the foundation different from a charity, which relies on donations and contributions for fundraising. We instead use the returns from our endowment’s investments to provide support for organizations driving social change on a global scale.
We spend more than the 5% required by U.S. tax code in the funds we allocate to these organizations. Our endowment continues to be invested responsibly and managed by our investment staff and board to ensure Ford can further its legacy of supporting organizations changing the world.
For more information, please visit: How we make grants
This is part of the Ford Explainer series, which details how the foundation is working to reimagine philanthropy.
Other videos in this series
How mission-related investments work
Every year, the Ford Foundation distributes 5% of its endowment to grants and program-related investments. The rest of the endowment is invested to generate the funds that will help support organizations in need for years to come. In an effort to reimagine philanthropy, these mission-related investments are designed to generate both social and financial returns.
How the Ford Foundation’s grantmaking works
Every year, the Ford Foundation makes around 1,400 grants to organizations fighting injustice around the globe. Our program teams identify and assess each organization, and then grants are made and monitored as part of the foundation’s aim to tackle inequality and reimagine philanthropy.
How program-related investments disrupt inequality
Along with our grantmaking, the foundation makes loans and equity investments that advance equality around the world. These program-related investments benefit organizations deemed too risky by traditional investors. These investments, which are eventually paid back, are then reinvested in new projects designed to create social change.