The $12 billion Ford Foundation will commit up to $1 billion — nearly ten percent of its assets to mission-related investments (MRIs)—the largest commitment of its kind by a private foundation—over the next decade. The foundation hopes to propel the impact-investing marketplace with this commitment and to encourage other investors to consider MRIs as well.
“We are making this commitment because we believe MRIs have the potential to become the next great innovation for advancing social good,” Darren Walker, president of the Ford Foundation, stated in a press release. “We need to expand our imaginations and our tools if we want to tackle the large-scale problems facing the world today. We can’t neglect the tremendous power of markets, including the capital markets, to contribute—and with today’s announcement, we are putting a significant amount of our money where our mission is.”
The foundation plans to gradually deploy funds from its existing investment portfolio to impact funds that generate both a financial and social return. The foundation promotes social causes including strengthening democratic values, reducing poverty and injustice, promoting international cooperation, and advancing human achievement. Affordable housing and access to financial services within emerging markets will serve as the foundation’s initial key areas of focus.
The Ford Foundation also intends to share the results and takeaways from its MRI program to help the marketplace further evolve. It plans to leverage its experience in programmatic-related investments to inform how foundations should approach MRIs, with the hope of expanding and diversifying the MRI market. In addition to its focus on MRIs, the foundation will intentionally ensure diversity, equity and inclusion within its investment team and how capital is committed.
“My conviction is that this moment offers us an opportunity to be accelerators of justice,” Walker said. “And my hope is that, before long, many more foundations will find ways to tap into the power of their own endowments.”
By Amrita Sareen-Tak