Key Points

Impact investing has grown dramatically over the past 15 years, with foundations playing a critical role through their program-related and, increasingly, mission-related investments. A smaller number, including the Ford Foundation, have dedicated grant and other programmatic resources toward growing the field. Without this funding, the metrics, engagement, policies, and norms needed to underpin capital markets at scale will be slow to materialize.

This article looks back at the long history of aligning financial investments with social values; touches on the Ford Foundation’s pioneering role in the emergence of PRIs as a tool to stretch grantmaking budgets; and details the impact of its 2017 decision to commit $1 billion to MRIs, using a portion of its endowment to invest in such vital areas as affordable housing, quality jobs, and health technology and demonstrating that an investor need not sacrifice financial return for a commitment to social impact.

This article highlights several reasons for foundations to strengthen the infrastructure of impact investing: the scale of the problems they seek to address, the proliferation in approaches to social impact, and the innovation potential of cross-sector partnerships. And it discusses a number of ways Ford has worked to build the field, specifically its focus on policy and regulation, impact reporting and management, and company engagement and collective action among investors. For Ford, impact investing is the tip of the spear, and sustainable investing is a bridge between the status quo and capital markets where all investments are made with intent to create positive impact.

Open Access