What's Up With That $18 Million Program Investment Fund at Surdna?

The New York-based Surdna Foundation is making a bold statement about how foundations of any size or any type can maximize their impact through creative uses of capital. Surdna’s board of trustees recently approved the creation of a $18 million fund for program-related investments (PRI) to fuel the foundation’s mission of building sustainable communities. But unlike the grants that Surdna makes, the foundation wants these PRIs to be repaid with a modest return on the investment. In doing so, Surdna expects to broaden the reach and impact of its other grantmaking programs.

“Our goal is to extend the impact of Surdna’s grantmaking strategies. We know that, in addition to grants, we can help achieve greater impact, and collaborate in new ways to accelerate our mission by using market forces to drive social change,” Phillip Henderson, President of the Surdna Foundation, said in a press release. “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.”

Surdna made its first PRI in February, with a $700,000 low interest loan to BOC Capital Corp., a small business development organization. This money helped capitalize a $3.5 million loan program that connects businesses owned by minorities and women in New York City’s construction industry. The foundation recently announced its second PRI as well. This new PRI is a $750,000 loan to San Francisco-based RSF Social Financial, a nonprofit financial services organization that supplies lines of credit and equipment loans to help food hubs provide healthy food to underserved communities.

This family foundation has been around for over 97 years, but it continues to explore new avenues to maximize the impact of its assets. “We hope the organizations Surdna supports will become more attractive to conventional investors who might otherwise be deterred from investing in them,” said Henderson.

Surdna makes PRIs by invitation only to both nonprofit organizations and for-profit businesses. However, Surdna has an open application process for project and general support grants in three program areas: sustainable environments, strong local economies, and thriving cultures. Recent New York City grants include $50,000 to the Brooklyn Academy of Music, $100,000 to the Coro New York Leadership Council, and $200,000 to the New York City Energy Efficiency Corporation.

The foundation accepts letters of inquiry on a rolling basis, which can be submitted online on the foundation’s How to Apply for a Grant page. Surdna employs a staff of about 25 professionals, and questions about the grantmaking program can be directed to grants@surdna.org .