Ford Foundation is committing $1 billion to money managers in Africa

The Ford Foundation is committing $1 billion of its endowment over the next 10 years to money managers who invest in affordable housing and financial services for people in developing countries, especially Africa.

In an email distributed on Wednesday, Ford Foundation President Darren Walker announced the decision by the Foundation’s Board of Trustees to authorize allocation over ten years of up to $1 billion from the endowment “for mission-related investments (MRIs) while calling on African organizations to set their own development agendas.

According to the President: “If we as a society are going to solve the world’s problems, every sector needs to play a role. The commitment is one of the largest ever made to MRIs, and the largest by a private foundation. The move sends a signal to other foundation and institutional investors that perhaps the time has come to consider the potential of impact investing.”

“I believe the time is right for us to look at this paradigm with fresh eyes—to consider how we might start to bridge the gap between philanthropic impact and investments.”

Xavier de Souza Briggs, vice president for the foundation’s Economic Opportunity and Markets program, who will be responsible for overseeing a team of investment professionals dedicated to managing the MRIs  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 Mr. Briggs.  “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.”

“In time, I fervently believe we will see a thriving, mature sector in which everyone can make impact investments that produce both sustainable financial returns and substantial social returns.”