Foundations > PRI’s > MRI’s > CDFI’s ?

I have long wondered if a major foundation could become a CDFI–or, more generally, what a foundation could achieve if it used its endowment as leverage for debt and other types of investments. Wouldn’t that be something?

This morning, the Ford Foundation announced that it will use $1 billion of its endowment over 10 years (so, $100 million per year on average) for Mission Related Investments (MRIs). At fiscal year end 2015, Ford reported an endowment of approximately $12.4 billion.

Ford Foundation President Darren Walker calls MRIs a “new tool.” It is a new tool for Ford, though The Heron Foundation started pioneering MRIs more than a decade ago and MRIs have gained momentum steadily. There is a healthy network of mission-related investors called the Mission Investors Exchange. Ford’s commitment appears to up the game.

MRIs are a version of what some people call “working endowments.”

CDFIs, by comparison to Ford’s commitment, have working endowments of more than $12 billion and possibly as much as $15 billion that they are using as mission-related investments every day, annually. Year after year. (Data compiled from industry analyses, CDFI Fund data, and my own research.)

How does that translate into lending volumes? The combined aggregate lending through Program Related Investments (PRIs) by the Ford, MacArthur, Casey, and other major foundations totals close to $750 million over more than 30 years. Much but far from all of that was loaned to CDFIs. PRIs are made out of grant funding and so are different than MRIs.

Ford effectively invented PRIs and MacArthur, in particular, helped promote them widely. Indeed, without that leadership it is questionable whether CDFIs would have succeeded as much as they have.

CDFIs lend upward of $10 billion per year now.

There are a few ways to think about this:

  • Foundations such as Ford, MacArthur, Casey, and Heron are again pushing the limits of philanthropy, opening opportunities that others can leverage.
  • Ford’s $1 billion commitment over 10 years is important but not game-changing; at the least, it’s promising but not yet proven as a strategic investment.
  • CDFIs are more accomplished and more substantial than they tend to recognize (notwithstanding the fact that the Trump Administration believes the industry is “mature”).
  • Or, The Ford Foundation (with approximately the same amount of working endowment as the The CDFI industry) could make a heck of a CDFI.




  1. Mark, this commitment by the Ford Foundation could have far-reaching implications for community development fiancé and impact investing. The Surdna Foundation recently announced its intention to incorporate MRIs into its overall impact investing strategy. While only a modest number of foundations currently use MRIs as an investment option, commitments by Ford and Surdna serve as a marker for other philanthropies to follow.

    For CDFIs, accessing foundation capital through MRIs raises several issues. Foundations seek market-rate returns for these investments. If a CDFI can’t offer those returns, it is highly unlikely that MRIs would be available. The rated securities recently issued by LISC might represent the type of investment opportunity that foundations would seek for their MRI portfolios. Lastly, for smaller CDFIs that can’t offer rateable debt, grants and PRIs will continue to be the way most foundation will invest in this space.


  2. Lee Beaulac · · Reply

    An exciting new development to be sure. With all of that leverage I want to make sure Foundations don’t compete “unfairly” with other traditional CDFIs as they seek dollars from Treasury and other publically supported sources of capital. Lee Beaulac


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