Program-related investments are loans and equity investments that foundations provide at favorable rates to support activities that have a direct charitable purpose. Frequently referred to as PRIs, they expand the resources from foundations - and, in the right circumstances, can be even more effective than grants. Any foundation can make PRIs, yet most shy away from them. In this guide, experienced PRI makers walk through the process, offering practical advice at each step - from explaining the concept to your board to structuring and closing your first deal..
What's in the Guide?
- Skills for getting started
- Making the first deal
- Lessons learned by PRI makers
- What Is a PRI? Program-related investments can be valuable tools for foundations, applicable in any field where below-market loans or other investments can advance charitable objectives.
- Deciding to Make PRIs: Putting the Pieces in Place: Before making its first PRI, a foundation should do a few basic things: assemble the necessary financial and legal skills, get its trustees on board with the idea, and locate a likely deal or two.
- How Three Foundations Got Their Feet Wet with PRIs: There's more than one way to get into the PRI pond. Here are three approaches: jumping into a full-fledged commitment to PRIs, wading in slowly while developing skills and policies as needed, or getting thrown in by circumstance.
- Making and Structuring Deals: PRI funders typically follow some basic steps as they analyze a potential deal, conduct due diligence, and establish its terms.
- PRIs in the Big Picture: Effective PRI makers tend to think strategically about how program-related investing can stretch a foundation's resources and expand their own skills as grantmakers.