The Los Angeles-based ECMC Foundation, which works to improve education for students in underserved communities, has announced a new funding strategy designed to tap the power of the private sector to solve problems of inequity in education.
As a complement to its traditional grantmaking strategy, the foundation, through its new Education Innovation Ventures (EIV) portfolio, will award program-related investments (PRIs) — below-market-rate loans — to partners with innovative, scalable solutions that improve educational and career outcomes for students from underserved communities. Unlike traditional grantees, PRI recipients are expected to generate both social gains and financial returns, resulting in additional dollars that can be recycled in perpetuity to create impact and strengthen the field.
The foundation's first PRI partners are the Employment Technology Fund, a U.S.-focused funder committed to supporting social enterprises that are working to eliminate barriers to employment for millions of underemployed low-income adults, and the Venn Foundation, a Minneapolis-based foundation that manages donor-advised accounts for funders interested in making investments using PRI tools.
According to ECMC, while 65 percent of all new jobs by 2020 will require some form of education beyond high school, today only 40 percent of adults have a postsecondary certificate or degree. Further complicating matters, a growing skills gap is making it difficult for employers to find workers with the skills needed to fill the jobs being created.
"The decision to include PRIs in our set of funding tools was borne from the frustration that my team and I felt about education and skills gaps, and our desire to expand our channels in providing more of a solution to the issue," said ECMC Foundation president Peter Taylor. "While grants play an important role in addressing problems in higher education, they aren't enough."