The story of the Program-Related Investment (PRI) made from the Max M. & Marjorie S. Fisher Foundation to Hebrew Free Loan is a lot like the field of impact investing itself: new, exciting, and uncertain.

Impact Investing, a vehicle in philanthropy in which foundations award social organizations with Mission-Related or Program-Related Investments, is redefining the role of philanthropy in communities across the country. Making investments, not just traditional grants, allows foundations to activate their endowments and mobilize those dollars for social change.

The Max M. & Marjorie S. Fisher Foundation went beyond their annual grant budget to make a $200,000 zero-interest loan to the Hebrew Free Loan (HFL) in 2013. Seven years later, 98% of the loan to HFL was repaid to the foundation. Those dollars will be reintegrated to the Foundation’s special Impact Investing budget carve-out and will be reutilized for future deals.

This $200,000 PRI was disbursed and repaid to HFL two times, as 62 personal, no-interest loans. These dollars helped Jewish borrowers with home repairs, general living expenses, buying used cars and even an in-vitro fertilization. In total, $400,000 of social impact capital came from this PRI—a 200% return on investment!

As both teams celebrate the incredible success of the deal, it is easy to mistake the tremendous success for an easy or smooth process. But as staff and volunteers from both groups are eager to point out, this loan was as complex as any other deal.

HFL’s business is making zero-interest loans to community members in need. Past loans have been issued for a range of medical and dental expenses, educational costs, car and home repairs, and more. Making a zero interest loan to the group “was a natural fit,” according to Douglas Bitonti Stewart, Executive Director of the Max M. & Marjorie S. Fisher Foundation. This was the Foundation’s first-ever PRI, the “first way of acting” after establishing a special budget carveout specifically for investments.

“There was trust in the board of Hebrew Free Loan, in its leadership, and in the vetting our team had done,” said Mr. Stewart. That leadership, specifically the guidance of Hebrew Free Loan Executive Director David Contorer, proved absolutely crucial to the PRI’s success.

An early friendship between Mr. Stewart and Mr. Contorer led the way for open, honest conversation and continual learning. Mr. Contorer emphasized that mutual respect was also key, citing that he always felt like a true partner in the work, without the typical funder/recipient dynamic.

Mr. Contorer, with decades of leadership experience in the Metro Detroit community, was an early advocate for impact investing, and knew right away that impact investments could have a huge impact on HFL. The Foundation had previously made several grants to HFL, and that “rich, robust history of grant support from the Fisher Foundation was critical to the success of the PRI,” said Mr. Contorer.

Phillip Wm. Fisher, Chairman of the Max M. & Marjorie S. Fisher Foundation Board of Trustees and the Impact Investing Committee, sites a shared culture for the success of the initiative. “Giving attribution for where [the deal] started is as important as the success itself,” Mr. Fisher said, calling the initial friendship between the groups “a connection of heart and mind.”

The strong relationship with HFL and a proven record of successful partnership were key elements to the success of this investment. Meredith E. Freeman, Director of Alignment & Impact Investing at the Fisher Foundation, noted that many other deals have been far more complicated when organizational culture was not as deeply understood, or when relationships between leaders were not yet established. Expectations were clear and established early in the deal, and pathways of communication left open for continued dialogue and learning.

There is more of “a human element” to this deal, Mr. Contorer shared, noting the trust and mutual respect that is intrinsically linked to both organizations. The human element is evident, too, in the work HFL does for the community on a daily basis.

Diane Starr, an Oak Park resident and recipient of a loan from HFL, described her experience with the group as “highly positive and absolutely wonderful.” The relationships she built with the staff were key to an overall warm and easy loan experience, according to Mrs. Starr, who said she would recommend Hebrew Free Loan to anyone in the community.

Mrs. Starr, who received her loan to install a new roof on her home, explained how much she and her husband loved their home, their neighborhood. The HFL loan, Mrs. Starr said, “provided a way for us to stay in the community. The more people we have in our community, the richer it will be.”

While impact investing may appear to some like a new trend in philanthropy, funders eager to launch or expand their efforts should first look to time-trusted partners for the greatest chance of success.