Frequently Asked Questions

Recoverable grants are impact-first investments made to impact-driven organizations with revenue-generating programs. Recoverable grants are like loans, except more flexible and borrower-friendly, as recipients repay only if the program the funds support is successful or it will not hurt the financial health of the organization. This means a higher social return on investment alongside return of capital.

Let’s take an example:

You make a $25,000 recoverable grant to an organization that lends to small businesses. If the small business loans made with your recoverable grant funds are successfully repaid, the organization returns your $25,000 to you after a predetermined amount of time.

For more detail please visit Recoverable Grants

Each recoverable grant portfolio has a 6 year term, meaning a recoverable grant made in 2023 will have the potential to be returned to your DAF account in 2029.

Like with any investment, there are no guarantees that capital will be returned with a recoverable grant. Repayment is based on the financial health of the organization at the time of repayment. Unlike with a loan, there is not a contractual obligation for the recipient to repay–this flexibility makes recoverable grants higher impact, but also potentially higher risk.

The recoverable grant recipients have gone through a robust vetting process conducted by our partner Social Finance and we believe there is strong likelihood of repayment based on their track records returning capital to investors, experienced management teams, and historical financial health and performance.

If you do not recover any or some of your recoverable grant, the unrecovered amount will be treated like a traditional grant. Any amount that is recovered would be returned to your DAF account and available to be granted out (either as a traditional grant or recoverable grant) in the future.

Themes for these portfolios were selected based on input from donors via focus groups and a webinar in Spring 2022. We also considered input from community stakeholders as part of a landscape scan to identify where recoverable grant capital was most needed in Greater Boston to address systemic inequities in the region. If this program is successful, we may expand to additional impact themes and will solicit additional input from donors and community stakeholders.

To curate our four Recoverable Grant Portfolios, the Boston Foundation and Social Finance undertook a comprehensive process to identify organizations with strong track records of impact and financial performance.

For more detail please visit Opportunity Selection Process.

If this pilot is successful, we would welcome donor’s feedback on additional impact themes we might consider expanding to or recipient organizations we might consider for inclusion in portfolios.

CDFI certification is a designation given by the US Department of Treasury to specialized organizations that provide financial services in low-income communities and to people who lack access to financing. CDFIs are private financial institutions that can take the form of banks, credit unions, loan funds, and venture capital funds. By funding small businesses, social enterprises, nonprofits, community facilities, and affordable housing, CDFIs create more equitable and vibrant communities.

The minimum recoverable grant commitment is $25,000 to participate through portfolios. This was set taking into account the minimum recoverable grant amounts from recipient organizations and the administrative costs associated with executing recoverable grant transactions.

Donors can make a recoverable grant to a single organization in a portfolio if they are able to meet that organization’s minimum. Minimums range from $25,000 to $1M. Please contact your relationship manager if you are interested in making a recoverable grant to a specific organization.

Yes. We are currently working to finalize the format and cadence of reporting to donors.

Donors must determine their individual portfolio allocations but are welcome to make equal contributions to each portfolio.

To cover the cost of sourcing, curating, and ultimately executing recoverable grant transactions, the Boston Foundation is asking for an additional donation from donors along with your commitment to recoverable grant portfolios.

We recommend a donation amounting to 2% of your total recoverable grant commitment (equivalent to approximately 0.33% for each year of the recoverable grant term). If you choose to make this additional donation, this amount will be charged to your DAF account.

Social Finance is a national impact finance and advisory nonprofit. Through Social Finance’s Impact Investing portfolio, the organization designs, launches, and manages impact-first investments and innovative financing solutions that measurably improve lives. Social Finance works with DAF sponsors and impact partners to deploy more DAF capital toward impact-first investments across a range of issues, including affordable housing, climate solutions, and financial inclusion. Since its founding in Boston in 2011, Social Finance has mobilized $350 million in new investments designed to help people and communities realize improved outcomes in education, economic mobility, health, and housing.

TBF’s new strategic vision, Our New Pathway, was inspired by the triple pandemic of COVID-19, the economic devastation it caused, and the very public exposure of the racial disparities that have long plagued our country. Our New Pathway is focused on repairing the harm caused by systemic and structural economic, social, gender and racial disparities across all dimensions in our society and invites TBF donors to partner with us on this mission.

Alignment with Our New Pathway was a central component of our process to vet and select the organizations within our recoverable grant portfolios. All of the organizations we selected are committed to closing systemic inequities and taking an equity-lens to their work (e.g., ensuring staff and management have lived experience with communities they are serving, experimenting with new approaches to underwriting that reduce bias, developing tailored products for individuals and communities that have historically been disinvested in). We partnered with the recipient organizations to identify ways in which recoverable grant capital would allow them to innovate and expand their impact for marginalized communities and address systemic inequities (e.g., lending to BIPOC small business owners, supporting affordable housing developers of color, expanding solar energy in low-income communities).

The recoverable grant portfolios are a pilot program at this stage to test demand from donors for this offering and gather feedback. If successful, we hope to continue to make recoverable grant portfolios available to donors as part of the broad spectrum of tools we make available to donors to help them achieve their charitable goals, inclusive of grantmaking, impact investing, and our standard investment pools.

To make a commitment, fill out the interest form and select the portfolio(s) you would like to make a recoverable grant into. Have more questions or are unsure about how much to give? Reach out to your relationship manager today.