When the Ford Foundation took the unprecedented step in June 2020 of issuing $1 billion in debt to help stabilize other nonprofits, it delighted investors and inspired several other large foundations to follow suit.
Two years later, the foundations all stand by their decisions to take on long term debt, allowing several to essentially double the amount of their grantmaking, the AP reports.
But they also caution they are unlikely to repeat the move any time soon.
The foundations mostly issued social bonds ranging from $100 million to Ford's $1 billion.
The unusual move allowed them to increase their donations and take advantage of favorable market conditions, instead of dipping into their endowments.
As of June this year, the Ford Foundation has spent more than 90% of the funds it raised in its only bond offering, with 70% of the grants so far going to organizations led by people of color and 87% going to general support, meaning the funds could be spent any way the organizations wanted.
"It just let us put on steroids something that we wanted to do anyway," says Hilary Pennington, an executive vice president of the Ford Foundation.
Greg Ratliff, senior vice president at Rockefeller Philanthropy Advisors, says issuing bonds was an innovative use of the foundation's assets.
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