Greater Good Blog

Lessons from a Dozen Years of Program-Related Investing

Guest Authors

By Brinda Ganguly and Nancy McPherson, the Rockefeller Foundation, and Cynthia Muller and Whitney Mayer, Arabella Advisors


In May, the Rockefeller Foundation released a new ebook—The Power of Impact Investing: Putting Markets to Work for Profit and Global Good. In it, Judith Rodin and Margot Brandenburg examine the potential of impact investing and the structures, systems, and practices that will need to take hold for it to go big and go global. Two of the key elements of that change are better data sharing among impact investors and better systems for evaluating impact investments. Today, the foundation takes a step toward both of those larger goals by releasing a comprehensive evaluation of its Program-Related Investment (PRI) Fund conducted by Arabella Advisors.

In 2013, the Rockefeller Foundation funded an independent evaluation of 12 years of PRIs, including 18 transactions totaling $23.9 million deployed both domestically and internationally. The resulting report assesses the portfolio’s social and financial performance, as well as opportunities to refine the PRI program strategy and align it with the foundation’s focus areas and grant-making programs. It also considers the foundation’s contributions to the larger impact investing ecosystem. While the report focuses specifically on the Rockefeller Foundation’s PRI portfolio, some broader lessons emerged that are worth sharing. Among them:

PRIs can be highly effective. The Rockefeller Foundation’s PRIs have contributed to the financial sustainability of its investees and are helping them accomplish social goals and achieve impact. Individual investments have helped extend access to products and services on more equitable terms and in new ways to previously excluded populations, and increase the number and quality of jobs in the United States, Mexico, India, and East Africa. As a result, ultimate beneficiaries have greater opportunities to improve their livelihoods and quality of life.

Access to capital remains a major problem in many places around the world. In several of the regions where the Rockefeller Foundation has made PRIs, access to capital remains a challenge, and investing in rural areas still lags behind investing in urban ones. Barriers to investment include challenging political, social, and economic dynamics, as well as limitations in organizational capacity and scale. In many cases, the foundation took catalytic or riskier positions in its international investments, lowering the risk for other investors and helping investees attract additional capital and partners. An example of this is when the foundation provided a guarantee to Centenary Rural Development Bank in Uganda to unlock credit for up to 8,000 smallholder farmers, which allowed for improvement in the farmers’ incomes and livelihoods.

There are times when PRIs are more effective when combined with grant funding. Many investees noted that staff development and leadership training were crucial to successful program implementation, which led the Rockefeller Foundation to reconsider how it might use both grants and investments to support the same organization. Foundations should consider how grant funding can complement PRIs and other impact investments to support organizations that are helping poor or vulnerable people and/or the environment.

Foundations can play a critical role in building partnerships that enable investments targeting vulnerable populations. By facilitating dialogue between various stakeholders, foundations can help to connect NGOs, investors, public policymakers, and private-sector actors. This coordination ensures that funds and fund managers have a network to rely on to ensure their work addresses the needs on the ground and fits within the broader issue area or geographical context.

Integrating impact measurement and evaluation into your impact investing practice is critical. Knowing what works and what doesn’t is critical for investors, investees, and other key stakeholders. Integrating social impact measurement into ongoing investment practice helps investors and investees remain accountable, and provides critical insight into what strategies are effective. It can also help investors make capital allocation decisions.

To help impact investing to go big and go global, we need to build better systems for measuring and evaluating impact investments, and we need to be more transparent with our data. The Rockefeller Foundation has already incorporated the feedback from the evaluation into its strategies—the foundation is partnering with southern universities to launch a course in impact evaluation, funding the creation of internal systems that will allow it to be more transparent with its data, and developing plans for a number of new PRIs that will allow the foundation to continue innovating in this space.

Impact investors should contribute to the growing body of shared data and knowledge on outcomes from impact investments. They should also share findings from evaluations with peers, industry organizations, and investees. By sharing data at the transactional as well as the portfolio level, we can identify more trends and opportunities in the field, promote best practices, and ultimately attract more capital to address the world’s most pressing needs. This report is an exciting step in that direction.

Editor’s note: This post was first published on the Rockefeller Foundation blog and is re-posted here with permission. Please click here to download the evaluation report.


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