The Cleveland Foundation is the world’s first community foundation — and one of the largest nationally — with nearly $3 billion in assets and annual grants of more than $120 million made in partnership with our donors since 2020. In addition to our grantmaking, the Cleveland Foundation is a national leader in impact investing, with $385 million in direct and indirect impact investments. As such, it stands to influence the market and the practice of social investing, in addition to its primary purpose of advancing Northeast Ohio’s economy and our place-based mission.
Partnering for Social Impact
Apply for a Program Related Investment:Download and Return our PRI Application
Apply for a Mission Related Investment:
Online MRI Application
Read more below to determine which application is right for you. Questions? Contact: ImpactInvesting@clevefdn.org
Catalyzing Meaningful Social Change
The Cleveland Foundation defines impact investments as opportunities that align social good with financial return to bring about positive social change. Our long-term objective is to achieve a meaningful impact that benefits the social health of the community and preserves or recycles capital while achieving a positive real return on loans and investments. With our impact investing tools and numerous partnerships, the foundation firmly believes that we must go beyond grantmaking to affect the social change we hope to see locally, nationally, and globally.
Typically, our impact investments focus on green energy, health care, job creation, neighborhood revitalization, social services, technology, and workforce development.
Unlocking Capital for the Greater Good
The Cleveland Foundation has been developing and deploying its impact investing program for 40 years. Currently, the program utilizes six primary vehicles:
- Recoverable Grants
- Program Related Investments
- Mission Related Investments
- Socially Responsible Investment Pool
- Racial Equity Investment Pool
- Real Estate Investments
Project Showcase
Famicos Foundation & Twelve Literary Arts
Evergreen Cooperatives
Astrup Building
RECOVERABLE GRANTS
Recoverable grants are extended to nonprofit organizations and paid back to the Cleveland Foundation without interest over a period of time. Our program areas include: arts & culture, economic & workforce development, education, the environment, leadership development, neighborhood revitalization & engagement, and youth development.
PROGRAM RELATED INVESTMENTS (PRIs)
PRIs are below market-rate loans, equity investments, and bank deposits or debt guarantees that the Cleveland Foundation uses to fill capital gaps and address community issues. As regulated by the IRS, PRIs must be made for the primary purpose of accomplishing a charitable outcome and not primarily for financial gain. These outlays can be extended to nonprofit organizations and community development financial institutions.
The Cleveland Foundation was the first community foundation in the United States to deploy a PRI in 1982 when it advanced nearly $4 million to purchase the land and buildings that saved Cleveland’s Playhouse Square from demolition and preserved the theater district as the unified whole that it is today: our country’s second-largest performing arts center outside New York City, attracting more than 1 million visitors per year.
MISSION RELATED INVESTMENTS (MRIs)
The Cleveland Foundation supports nonprofits, early-stage private equity and venture capital, and public or private companies that are aligned with our mission via direct or indirect MRIs. Our MRIs frequently center on job creation, economic development, research, and technology advancements that will provide impact for the community. We also look for environmental and sustainable impact investments, housing development investments, and financing for BIPOC- and women-led and owned companies.
SOCIALLY RESPONSIBLE INVESTMENT (SRI) POOL
Cleveland Foundation donors are invited to participate in our impact investing program through the SRI pool, which was established in 2002. The pool was custom built for the foundation and invests in U.S. public and private companies screened for social and environmental responsibility, gender diversity, and a place-based emphasis on Cleveland.
RACIAL EQUITY INVESTMENT (REI) POOL
Also an option for donors, the Cleveland Foundation launched an REI pool in fall 2020, the first of its kind among the largest U.S. community foundations. The pool is focused on investing in U.S. public and private companies that (1) are inclusive of Black, Indigenous, and people of color (BIPOC) representation on their boards (targeting 50% more representation than the Russell 3000 Index), (2) have a history of fostering an inclusive, equitable and diverse workplace culture, and (3) have a stated commitment to racial equity. Outside the U.S., the pool invests with BIPOC owned (>50%) investment firms to help equalize the diversity imbalance in investment management.
REAL ESTATE INVESTMENTS
With our MidTown Cleveland headquarters project as an example, the Cleveland Foundation invests in real estate deals that serve the community via economic development, resident wealth building, place preservation, and the environment.
Impact Investing Program
Recoverable Grant |
Program Related Investment |
Mission Related Investment |
Socially Responsible
|
Racial Equity Investment pool |
|
Lower |
Expected Investment Return |
Higher |
|||
Return |
0% interest |
2-3% (Subsidized) |
Market return |
Market return |
Market return |
Definition |
Grants paid back to the foundation without interest |
Loans, equity investments, and bank deposits or debt guarantees that fulfill a social benefit aligned with the foundation’s mission |
Direct or indirect investments (fund of funds) that fulfill a social benefit aligned with the foundation’s mission |
U.S. public and private companies screened for social and environmental responsibility, gender diversity, and a place-based emphasis on Cleveland |
U.S. public and private companies that are inclusive of BIPOC representation on their boards and BIPOC-owned (>50%) investment firms outside the U.S. |
Eligible Recipients |
Nonprofit organizations |
Nonprofit organizations and CDFIs (Community Development Financial Institutions) |
Nonprofits, early stage private equity and venture capital, and public or private companies |
Publicly traded and private companies |
Publicly traded and private companies |
Term |
Less than 5 years |
1-7 years |
5-7 years |
Trades dailyPool est. in 2002 |
Trades daily
|
Funding Source |
Grantmaking |
Special purpose fund |
Endowment |
Donor-advised funds, Organizational funds, Corporate-advised funds |
Donor-advised funds, Organizational funds, Corporate-advised funds |
Recent Impact Investing accomplishments
Knight Diversity of Asset Managers Research Series: Philanthropy
The Cleveland Foundation is proud to be part of the Knight Foundation’s Circle of Transparency by participating in the Knight Diversity of Asset Managers Research Series. Learn more about the series here.
ABFE’s Investment Manager Diversity Pledge
The Cleveland Foundation is proud to sign ABFE’s Investment Manager Diversity Pledge, demonstrating a focus on finding the best investment management talent and aligning with the mission of community philanthropy by helping to build wealth in communities of color and among women. We also seek to collaborate with other entities that share our values of diversity, equity and inclusion. Click here to learn more.
Police Brutality Bond exclusion
Police Brutality Bonds are municipal bonds that have a clause that allows them to be used to settle police misconduct claims, putting the repayment and interest burden on the taxpayer instead of the officers committing the crimes. As part of our Impact Investing program, the Cleveland Foundation took the position of not owning these types of bonds anywhere in our portfolio. After a scan of our holdings in fall 2020, we found and immediately sold a very small position in such assets. Although this divestiture is a small statement in dollars, we hope that it will lead to a conversation inspiring other investment managers to screen their own portfolios and encourage municipalities to put more of this burden on the liable officers and not the public.
Interested in learning more? Please contact us via: ImpactInvesting@clevefdn.org