The Ford Foundation Social Bond, Series 2020
|Primary impact area||Impact area||Geographic location of impact||Investment commencement||SDG alignment|
|Social||Provision of Community & Social Services||North America, Global||2020||
The non-profit or third sector provides an important connector between government and philanthropic funders and under- served populations, people and communities in need, to address important issues of inequality and social justice, ‘yet more than half of these organisations struggle to become financially sustainable and meet that demand’.
Following the rapid economic effect in early 2020 of the COVID-19 virus, and the impact this had on the non-profit sector due to the drop in charitable giving, and deepening need due to the recession, Ford Foundation issued a USD1 billion social bond offering to increase grant funding and support viability of charitable organisations. The proceeds of the bond will be allocated over the course of 2020-2022. These Special Allocation Grants are focussed on building resilience in the non-profit sector and stabilising and strengthening the social justice sector.
The Ford Foundation, founded in 1936, is one of the largest philanthropic organisations globally. The Ford Foundation focuses on supporting visionary leaders and organisations working in key social justice issues: civic engagement and government; gender, racial and ethnic justice, technology and society; natural resources and climate change; future of workers; creativity and free expression (US Only), and cities and states (US only).
The Foundation ‘believes the non-profit sector has been severely harmed by the COVID-19 pandemic and its economic fallout, and that non-profit financial organisations will require substantial financial resources to continue to carry out their charitable missions. In response, the Foundation seeks to substantially increase its grant making in coming years directed at building the resilience in the NFP sector and stabilising and strengthening the sector’.
This is a commercial social bond issuance by Ford Foundation, rated AAA (Moodys)/AAA (S&P), and issued in line with the ICMA Social Bond Principles. Security-holders receive interest coupon payment, with a 30- and 50-year term.
The funds will help stabilize and strengthen the non-profit sector along with building the long-term resilience of social justice organisations in the US and around the world.