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. Through them, 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.
Working through intermediaries can facilitate collaboration with other funders and pooling of resources for re-granting to others. It also makes it possible for us to augment the efforts of our staff with those of individuals with specialized expertise and deep local engagement. This approach also channels local knowledge back to MacArthur, so that we understand the impact of our resources and when it may be necessary to adjust our approach. We often will engage directly with the ultimate recipients of our funds to understand better their accomplishments and challenges.
Effective intermediaries are well-run, knowledgeable organizations with the capacity to grant or invest our funds and oversee their use. The following are just some of the examples of our use of intermediaries in our grantmaking:
Community development financial institutions also act as intermediaries. For 30 years, MacArthur has made impact investments (low-cost loans, equity investments, and guarantees) to such organizations in Chicago and across the country, including the following:
There are many more examples of our granting to or investing with intermediaries. While this approach makes it impossible for every recipient of MacArthur funds to have a direct relationship with the Foundation, we believe that 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.