The Ford Foundation has said it will commit up to $1bn from its $12bn endowment over the next 10 years to mission-related investments (MRIs).

“We are making this commitment because we believe MRIs have the potential to become the next great innovation for advancing social good,” said Darren Walker, President of the Ford Foundation. 

“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 we are putting a significant amount of our money where our mission is,” he added.

The foundation will gradually carve out funds from its existing investment portfolio and deploy them over time into funds seeking to earn not only attractive financial returns, but concrete social returns as well.  

Initial investments will focus on areas where the foundation has deep prior experience and sees both significant investment opportunity and significant alignment with its mission to reduce poverty and injustice.  

Two initial areas of focus are affordable housing in the US and access to financial services in emerging markets.

Xavier de Souza Briggs, Vice President for the foundation’s Economic Opportunity and Markets program, will be responsible for overseeing a team of investment professionals dedicated to managing the MRIs. 

He said capital will be allocated to established impact funds, not to individual companies.

“No matter the investment, our choices will be an extension of our history of seeking the most innovative ways to promote a more inclusive economy,” said Briggs.  

The foundation pioneered, in 1968, the field known as “program-related investments” (PRIs)—a programmatic tool that allowed foundations to offer not only grants but also low-interest loans and equity investments to catalyze social impact in market-related arenas such as urban development, homeownership, microfinance, certification models to guide responsible consumer choices, and other fields. 

The foundation’s success in managing more than $650m in PRIs over the years encouraged it to consider the next step: mission-related investments directly from its endowment.

“We are applying what we have learned from PRIs to inform the way we approach mission-related investing. The result, we hope, is to expand and diversify the market for MRIs so that it becomes easier for other institutional investors to invest in ways that consider social impact,” said Briggs.

As the foundation launches its mission-related investing, one key objective is to promote diversity, equity, and inclusion within the investment movement, paying attention to the makeup of investment teams, as well as where they invest, and with what values.

“My conviction is that this moment offers us an opportunity to be accelerators of justice. And my hope is that, before long, many more foundations will find ways to tap into the power of their own endowments,” said Walker.

The Ford Foundation is an independent, nonprofit grant-making organization. 

With headquarters in New York, the foundation has offices in Latin America, Africa, the Middle East, and Asia.