Making grants is just one way the Ford Foundation creates social impact. We also make loans and equity investments, known as program-related investments (PRIs), to organizations addressing the drivers of inequality.
These program-related investments are eventually repaid by the organizations that receive them, and that money is then reinvested in new projects that support our mission of building an equitable future. Because a PRI is a loan that’s paid back, the foundation is able to do more with its resources and, in turn, support more organizations working to create positive social impact.
PRIs can sometimes seem risky to traditional lenders so that’s where the foundation steps in, providing what’s known as anchor funding to help build confidence so other investors follow suit. PRIs can also benefit organizations by helping them develop their financial planning skills since they need to provide a 10-year plan to qualify for an investment.
These types of investments are a form of impact investing Ford has pioneered since 1968, when it lobbied Congress to allow their use. Since then, the foundation has committed a significant portion of its endowment to PRIs, from the establishment of a women’s poultry co-operative in India to the expansion of credit unions serving low-income communities in California.
Along with providing grants, PRIs are another powerful way the foundation works to reimagine philanthropy.
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.