Ford Foundation Getting Serious About Impact Investing
With a total endowment of about $12 billion, that means there’s about $600 million granted toward charitable programs each year. (That 5% figure is the minimum requirement to maintain nonprofit status under federal tax code.) But it also means that 95% of the foundation’s money is sitting in stocks, private equity, real estate, and venture capital, not leveraged in the same socially responsible manner that the foundation insists on when making its grants.
In recent years, president Darren Walker has grown uncomfortable with that imbalance, which he sees as another “classic disconnect” affecting well-funded but sometimes apathetic institutions, including Ford. “We won’t solve big problems without deploying some part of that 95%,” Walker says. “So what I’m hoping is that we are reaching an inflection point, a tipping point in which the momentum has shifted to normalize a conversation about how foundations use our endowments from the margins to the mainstream. For too long this question has been sidelined. And I think the time has come where we’ve got to take it on and we’ve got to demonstrate the capacity to use our endowment to advance our mission.”