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Five years of Mission Investments – Ford Foundation

Our impact and lessons learned

Five years ago, the Ford Foundation made a $1 billion commitment to impact investing, the largest effort among all foundation endowments. The news of the commitment spread far beyon…….

Our impact and lessons learned

Five years ago, the Ford Foundation made a $1 billion commitment to impact investing, the largest effort among all foundation endowments. The news of the commitment spread far beyond philanthropy. It garnered the attention of The New York Times and even Harvard professors, who came knocking on our door with a request to study this historic initiative as part of the Business School’s curriculum. Never before had a foundation, operating within its fiduciary duty, taken the risk to deploy such a large pool of capital to address both major social challenges and seek financial returns.

But in the announcement’s bright glow and high hopes that Ford could prove generating financial returns and social impact is possible, we also encountered some skepticism that our goal was little more than a pipe dream. Such skepticism is healthy—and it’s one reason why we spent a year researching whether we should put our endowment capital at risk and place a big bet on the emerging sector of impact investing.

So far, so good.

Since that announcement five years ago, our Mission Investments portfolio has generated measurable social impact across all of our areas of investment, including affordable housing, diverse fund managers, financial inclusion, quality jobs, and health tech. As of 2021, 80% of Mission Investments’ fund managers are at least part-owned by women and people of color. Our affordable housing fund managers have helped preserve over 23,000 rental units for families across the United States. Our financial inclusion fund managers have reached over 76 million consumers in emerging markets, helping to provide them access to savings, remittance, insurance and other financial products. And our health-tech fund managers have invested in 15 companies developing diagnostics, therapeutics, and vaccines in the Global South.


“So far, Mission Investments has generated triple the return required to sustain the foundation’s perpetual existence.”

Some wondered whether we’d have trouble finding enough prudent market-rate impact investments. We are pacing well with our 10-year gradual investment program, having approved investments totaling 90% of our available capital ($385 million out of $425 million allocated through December 31, 2021), with a deep pipeline of potential investment opportunities.

Most of that early skepticism revolved around our ability to generate the financial returns required to sustain a perpetual foundation. A perpetual foundation must generate financial returns over the long term that amount to our spend rate plus inflation, a figure that has hovered between 7-8% over the last few decades.

Mission Investments has generated a compound annual return rate of 28% from its inception in 2017 through 2021. That’s triple the return required to sustain the foundation’s perpetual existence. While we are pleased with that strong performance, which …….

Source: https://www.fordfoundation.org/news-and-stories/stories/posts/five-years-of-mission-investments/

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