Through two funds, Ford makes investments that are aligned with our social justice mission: a long-standing program-related investment (PRI) fund, financed through our grant budget, and a new mission-related investment (MRI) fund, which is part of our endowment. Through both, we seek to generate impact directly, and also to generate lessons of broader value to the investing marketplace.
The PRI Fund is a catalytic source of capital that is especially important for bearing the risks of early-stage innovation. The Ford Foundation pioneered the use of PRIs in 1968, and since then we have invested more than $630 million in the form of debt capital, equity, and guarantees.
Historically, Ford has used PRIs to support social entrepreneurs and community development institutions in their efforts to preserve affordable housing, improve access to financial services and markets, create quality jobs, and advance arts and media. As risk capital, our PRIs have seeded innovative new forms of finance—including America’s first affordable housing real estate investment trust (REIT)—and helped seed and scale the fields of microfinance in the Global South and community development financial institutions (CDFIs) in the US. Now, our PRIs are targeting opportunities to advance first-time impact investing fund managers, with a priority to support management teams that are diverse in terms of race and gender. We also emphasize the use of PRIs as a catalyst for scaling private sector investment—for example, by reducing real and perceived risks in key impact sectors.
PRIs generally come out of a foundation’s grant budget and count toward the five percent of assets that US foundations are required, under tax law, to pay out every year. PRIs must primarily serve a charitable purpose; for tax reasons the principal is treated like a grant. Unlike grants, however, PRIs are expected to be repaid. Unlike mission-related investments, PRIs are not designed to deliver competitive market rates of financial return.