Impact Investing

Investing in Change: Aligning Investments With Our Mission and Values

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At The California Endowment we conscientiously seek to use our power as investors to lift up communities.

Impact Investing allows us to complement our grantmaking to not only accelerate and deepen our pursuit of health and racial equity, but to also pursue new financial practices that deliver social returns alongside financial ones.

We believe our capital has an important role in contributing to our vision of wellness, inclusion, and shared prosperity.

Impact Investing’s potential to advance and amplify our pursuit has never been greater. By aligning investments with our mission and values, The Endowment’s approach considers a constellation of opportunities to inject capital systemically into the connective tissue of communities.

Our current Impact Investing practice includes $350 million allocated to Program-Related Investments (PRIs) and Mission-Related Investments (MRIs).

We Make PRIs

The Endowment has committed $200 million for Program-Related Investments (PRIs). PRIs are charitable, mission-aligned investments which are unique to philanthropy. The Endowment’s PRIs typically take the form of low-cost financing and loans, which require repayment within a specified time.

Program-Related Investment Portfolio Snapshot (1999-2022)

$179M

Committed in PRI loans and guarantees

56

PRIs made to 41 organizations

$116K-20M

RANGE IN PRI SIZE WITH A MEDIAN OF $2 million

Cumulative PRI Dollars Deployed

The Endowment’s first PRI was made in 1999 to the Rural Communities Assistance Corporation, a mission-driven community development financial institution that supports rural communities. Since then, we have deployed nearly $139MM in PRIs and guarantees*.

*Deployment amount represents the total drawn down by PRI partners and disbursed by The Endowment, which may be lower than the total amount committed. PRI guarantees are also not included in the funded amount.

We primarily make PRIs to community-based nonprofit financial intermediaries, enabling collaboration that advances community priorities and voices.

These intermediaries are well positioned to deploy capital to build community power and prosperity. Once those PRIs are repaid, that capital can be invested again. The Endowment does not make direct investments into community-level enterprises. This model focuses on supporting healthy and prosperous communities in CA and goes beyond the traditional investment approach focused only on protecting and growing financial assets.

Read about our PRI journey in our new report, Building Trust and Equity: What The California Endowment Has Learned from Over a Decade of Impact Investing.

 

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Sample PRI Recipients

Our PRI recipients are dedicated to serving vulnerable and disinvested communities in California. Here are just a few examples of our PRI partners:
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Community Investment Guarantee Pool

In January 2020, The California Endowment, in partnership with LOCUS and foundations across the country, launched the nation’s first guarantee pool focused on community needs.

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Self-Help Federal Credit Union

SHFCU has been a long-term partner of The California Endowment. The CDFI provides responsible and fair financial products to low-income populations and is building a more equitable and just financial system in CA.

Genesis LA

This community development financial institution is a partner of The California Endowment in Southern CA. Genesis works in close collaboration with community to finance projects that support nonprofits, affordable housing, community facilities and economic development.

Four Principles in Action

Advance Racial Equity

Three-year $900,000 catalytic grant to African American Alliance of Community Development Financial Institutions (CDFI) CEOs.

Practice Trust-Based Impact Investing

In solidarity with its PRI partners, The Endowment announced in April 2020 that it would provide six-month interest forgiveness for all PRI borrowers.

Center Community Priorities

A $6 million PRI and $800,000 grant to ROC USA to scale up their work in California.

Strengthen Ecosystems

Community listening and a PRI to a government entity, the Fresno Housing Authority (FHA).

We Make MRIs

The Endowment is part of a growing movement among foundations to activate their investment portfolios in pursuit of their missions. Using Mission-Related Investments (MRIs) as part of our mix of strategies, we are focused on generating risk-adjusted market-rate returns while also incorporating social impact returns.

As of 2023, The Endowment has committed a $150MM allocation for MRIs.

The MRI portfolio invests in venture capital, private equity and affordable housing across the United States. As of March 2023, we have committed $39MM to MRI managers focused on advancing racial equity, affordable housing, health care and other impact areas.

We are partnering with asset managers that align with our mission and values of creating a more inclusive and equitable capital system for all. These managers are active in building new ecosystems and networks that are more inclusive and changing the narrative about what is investable and who is investable. Working alongside other institutional investors that are authentically using impact as part of their investment theses, we join our peers in an effort to influence financial markets more broadly for social change.

FAQs & Resources

What is a PRI?

PRIs are charitable, mission-aligned investments which are unique to philanthropy. At The Endowment, a typical PRI takes the form of low-cost financing and loans, which require repayment within a specified time.

While the IRS allows a variety of uses for PRIs, The California Endowment makes PRIs based on its PRI strategy and approach. The typical recipient of a PRI from The Endowment is a mission-aligned community development financial institution (CDFI) or other type of intermediary working in California.

The Endowment works with intermediaries, who are deeply rooted in communities and have specialized expertise in areas such as affordable housing, small business, fresh food, etc. We encourage you to work with a local CDFI partner in your community.

The Endowment’s PRIs are primarily focused in California although we do consider investments with national significance that fill gaps and build the field. We invest our MRIs nationally.

Yes! By working alongside other institutional investors that are authentically using impact as part of their investment theses, we join our peers in the movement to address the inequitable access to capital among low income communities, women and people of color. We hope this movement can significantly influence financial markets more broadly for social change.

Building Trust and Equity: What The California Endowment Has Learned from Over a Decade of Impact Investing
The California Endowment

Building Trust and Equity: What The California Endowment Has Learned from Over a Decade of Impact Investing

Leveraging Foundation Balance Sheets for Greater Impact: Piloting a Pooled Guarantee Program
Foundation Review

Leveraging Foundation Balance Sheets for Greater Impact: Piloting a Pooled Guarantee Program

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How The California Endowment is investing for health and racial equity
Impact Alpha

How The California Endowment is investing for health and racial equity

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The Power of Coalition-Building: Confronting Racial Inequity in Small Business Lending
The California Small Business Coalition for Racial Justice

The Power of Coalition-Building: Confronting Racial Inequity in Small Business Lending

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Philanthropy for Outsized Impact: The Power of Program-Related Investments
Capital ​Impact Partners

Philanthropy for Outsized Impact: The Power of Program-Related Investments

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Impact Investing for Health Equity – Lessons from The California Endowment’s ACA and Prevention Program-Related Investments
The California Endowment

Impact Investing for Health Equity – Lessons from The California Endowment’s ACA and Prevention Program-Related Investments

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Five Practices for Developing and Staying Accountable to Racial Equity Goals
SSIR

Five Practices for Developing and Staying Accountable to Racial Equity Goals

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Moving Forward

We are forging ahead and continuing to expand our work. We hope you check back soon for our next chapter.

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What We're Focused On

We envision a “California for All” that leads the nation as a powerful and conscientious voice for wellness, inclusion, and shared prosperity. Find out more about the work we do.

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