The magnitude and complexity of the challenges that lie between today and a future in which just and sustainable communities are the norm demand that we approach our work differently. Grant making is the primary tool we use in pursuit of social change, but it is not the only tool. To create economic and social value, Surdna created an $18 million Program Related Investment (PRI) revolving fund to use our capital to harness the efficiencies and power of the market in support of our mission.

PRIs, which are typically loans or loan guarantees, are designed to generate both a social and a financial return. Like grants, they are made to achieve specific outcomes, such as creating conditions for good jobs or expanding food hubs that fulfill our programmatic goals. Unlike grants, they are expected to be repaid, often with a modest return on investment. Once repaid, the money can be recycled into new charitable purposes, extending the reach and impact of the foundation’s programs.

Providing funds at below-market rates can be particularly useful when capital is needed to start up, grow, or sustain a social enterprise, or when results cannot be achieved with grants alone. Our hope is that the organizations Surdna supports will become more attractive to conventional investors who might otherwise be deterred from investing in them. As an investor, we are also encouraging investees to strengthen their business practices—by improving cash flow, building financial capacity, creating a track record—so that they can in turn improve their ability to attract capital from private sector investors seeking market rate returns.