Using Intermediaries for Impact
November 2, 2022 | Article

Through intermediary organizations, we can help ensure that our grants and impact investments reach small and mid-sized organizations or are invested in local projects, businesses, or other financing vehicles.


Like a number of foundations, we often make grants to intermediary organizations to take advantage of the knowledge, connections, networks, expertise, and resources of these entities. Intermediaries are organizations vested with responsibilities to take on a range of functions in support of grantees, initiatives, and other organizations. Through intermediaries, we help ensure our grants and impact investments reach small and mid-sized organizations or are invested in local projects, businesses, or other financing vehicles.

Working through intermediaries can facilitate collaboration with other funders and the pooling of resources for re-granting to others. It also makes it possible for us to augment the efforts of our Staff with individuals who have specialized expertise and deep local engagement. This approach channels local knowledge back to MacArthur, so we understand the impact of our resources and when it may be necessary to adjust our approach. We often engage directly with the ultimate recipients of our funds to better understand their accomplishments and challenges.  


Grantmaking Intermediaries

Effective intermediaries are well-run, knowledgeable organizations with the capacity to grant or invest our funds and oversee their use. The following are some examples of our use of intermediaries in our grantmaking:

  • In Chicago, MacArthur collaborates with the Field Foundation of Illinois to issue awards for Leaders for a New Chicago—individuals who reflect the city’s population; lead and work in the areas of the arts, justice, or media and storytelling; and whose influence will inform decision making across the city.
  • With other local donors, MacArthur supports the Crossroads Fund with a grant directed toward the Chicago Racial Justice Pooled Fund to build and sustain movements for justice that center Black lives and address anti-Blackness.
  • A grant to NEO Philanthropy supports a multi-state campaign to help bring about state-level change in the administration of juvenile justice across the country.
  • MacArthur’s Criminal Justice program worked with the Urban Institute to develop the Safety and Justice Challenge Innovation Fund, which provides grants and technical assistance to communities to help safely reduce the jail population and eliminate racial disparities.
  • In Nigeria, a grant to Resource Centre for Human Rights & Civic Education (CHRICED) enhances the capacity of Indigenous communities, also known as Original Inhabitants, in Nigeria's Federal Capital Territory (FCT) Abuja to support resilient growth following the COVID-19 pandemic.


Impact Investment Intermediaries

MacArthur has made impact investments (low-cost loans, equity investments, and guarantees) to loan funds and specialty financial institutions, including Community Development Financial Institutions (CDFIs), in Chicago and across the country, including the following:

  • Impact investments totaling $2.5 million to IFF and Fifth Third Bank to create the Arts and Culture Loan Fund, which provided small working capital lines of credit to MacArthur grantees in Chicago and surrounding suburbs. Through this program, organizations such as Black Ensemble Theater, Deeply Rooted Dance Theater, and the Chicago Youth Symphony secured loan capital to bridge expenditures on staff salaries, costumes, and other expenses prior to earning revenue from ticket sales.
  • Impact investments to IFF and the Chicago Community Loan Fund helped fund projects like the Arts and Recreation Center at Ellis Park, a multi-purpose community center in the Oakwood neighborhood, and Trinity United Church of Christ’s development of Imani Village, a project that included affordable rental housing, a health center, and an urban farm.
  • Impact investments to create and expand the Housing Partnership Equity Trust, a social-purpose real estate investment trust (REIT) launched in 2013 and later acquired by Lincoln Avenue Capital, leveraged more than $70 million in equity capital, enabling this collaborative of leading nonprofit housing owners operating in 30 states to acquire and preserve affordable rental properties serving more than 2,500 households.
  • Impact investments totaling $30 million to the Opportunity Finance Network; coupled with another $60 million from Wells Fargo, Prudential, and the Kresge Foundation; funded major loans and grants to outstanding CDFIs through the NEXT Awards, an annual competition conceived by MacArthur that ran from 2007 through 2017.   

There are more examples of our granting to or investing in intermediaries. While this approach makes it impossible for every recipient of MacArthur funds to have a direct relationship with the Foundation, this is one of several effective ways for MacArthur and other philanthropies to operate, as it extends the reach of our resources and amplifies the potential for impact.   

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