As the economic crisis precipitated by the COVID-19 pandemic has unfolded in 2020, nonprofit institutions have stepped up to provide shelter for the homeless, food for the hungry, and health care for those in need. Afinancially strong nonprofit organization that can provide this support through economic downturns does not happen by itself, however. It takes planning, investment, skill and hard work. As funders, policymakers, and practitioners consider how to foster financially strong nonprofit institutions that can help with the current and future crises, it is worth reflecting on the effectiveness of past efforts to support the growth of nonprofit institutions.
In the early 2000s, the John D. and Catherine T. MacArthur Foundation (MacArthur) launched one such effort. MacArthur sought to support the growth and sustainability of a group of nonprofit affordable housing developers through program-related investments (PRIs) that provided long-term flexible equity-like capital. This report summarizes the results of Abt Associates' evaluation of this initiative. Among other conclusions, Abt found that these investments played an important role in helping the developers survive and even thrive during the last major economic upheaval, the Great Recession. The flexible financing provided by the PRIs helped the nonprofit developers achieve larger scale, improve financial and staff capacity, and react creatively to changes in economic and social conditions.