Publications and Articles

The following publications and articles related to program-related investments may be useful to you as you develop or maintain your PRI program.

Books

The PRI Directory: Charitable Loans and Other Program-Related Investing by Foundations
The Foundation Center. August 2003, 207 pp. 2nd Edition.
This directory lists leading PRI providers and includes tips on how to seek out and manage PRIs. Foundation listings include funder name and state; recipient name, city, and state (or country); and a description of the project funded. There are several helpful indexes to guide PRI seekers to records by foundation/recipient location, subject/type of support, and recipient name, as well as an index to officers, donors, and trustees. (3rd Edition expected 2009-10.)

Program-Related Investments: A Technical Manual for Foundations
Christie I. Baxter, 475 pages, May 1997.
Program-related investments (PRIs) are hybrid grants/loans made by foundations to charities. They allow foundations to stretch their limited funds further. This book provides foundations with guidelines for evaluating PRIs, monitoring grant recipients, and tracking returned funds. Chapters include: The PRI Decision: From Policy to Program; Federal Tax Considerations for Private Foundations; Documenting Direct Investments; Investing in Intermediaries; Supporting Ventures; and Evaluation.

GrantCraft Guide - Program-Related Investing: Skills & Strategies for New PRI Funders
Program-related investments, 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. HIGHLIGHTS: skills for getting started; making the first deal; making mistakes – lessons learned by PRI makers. GrantCraft interviewed five experienced PRI funders find out how they handle the challenge of assessing and managing risk within their foundations.

Economic Development: A Legal Guide for Grantmakers
Jane C. Nober, 2005, 125 pages, $59. Published by Council on Foundations, this guide provides an in-depth legal knowledge of charitable tax law, including implications for program-related investments. Grantmakers committed to boosting the economic vitality of their communities will turn to this comprehensive legal guide again and again. The work covers a range of topics, from fundamental issues such as how to determine whether an economic development project serves a charitable purpose to sophisticated ways to structure economic development assistance. The book contains information that all grantmakers can use plus specific guidance for private foundations, community foundations and corporate grantmakers.

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Articles and Editorials

Capital With a Conscience: Private foundations must distinguish carefully their
investments’ purpose, character and strategy.
Jane M. Searing, Clark Nuber PS. 2008. 5 pages.
This article offers a history and prospective use of investments from a CPA's perspective. Searing de-mystifies the similarities and differences between PRIs and mission-related investments and offers some suggestions why they are becoming more popular with philanthropists to meet their mission objectives as well as expenditure responsibilities.

New Strategies for Leveraging Foundation Assets: There are many options, and the choices can seem overwhelming at times.
James P. Joseph and Andras Kosaras, Arnold and Porter LLP. July/August 2008. 15 pages.
A wealth of information, reports, and case studies is beginning to appear as an increasing number of foundations are asking how they can engage in mission-related investing. PRIs offer one form of mission-related investment and these can be made directly or through intermediaries. For foundations that are interested in making market-rate mission-related investments, integrated project planning (IPP) provides a practical tool to select investments. By linking investments to existing or proposed grant projects, IPP focuses and narrows the options a foundation needs to consider. Includes a list of questions foundations should consider in their decision-making.

How Grant Makers Can Curb Global Warming
Steve Viederman, Jessie Smith Noyes Foundation. Chronicle of Philanthropy, January 2008.
Foundations of all sizes can and should use their financial assets to make a difference. The time is now for foundations to add their names to the list of proxy voters expressing their sentiments about climate change and the environment. Viederman suggests some options for philanthropy to support marketplace solutions to climate change, including investment opportunities resulting from the business and social risks of global warming.

A Capital Idea: Total Foundation Asset Management and The Unified Investment Strategy
Jed Emerson, January 2002.

Blended Value Investing: Capital Opportunities for Social and Environmental Impact
World Economic Forum, March 2006. Researched and drafted by Jed Emerson, Generation Foundation, and Joshua Spitzer.

Charities Need More Investment Capital
Lester M. Salamon, August 2006.

Changing Capital Markets and Their Implications for Community Development Finance
Kirsten Moy, Alan Okagaki, July 2001.

CDFIs: Providing Capital, Building Communities, Creating Impact
Community Development Financial Institutions Data Project, 2004.

The Double Bottom Line: Competitive Advantage through Community Investment
Ford Foundation.

The Double Bottom Line: Ideas to Action
Philip Angelides, June 2001.

Foundation Trustees Need a New Investment Approach
Mark R. Kramer, Foundation Strategy Group, The Chronicle of Philanthropy, March 2006.

A New World Order: Jed Emerson's Capitalist Utopia. Can Social Value Reward Investors, Companies?
Jon Gertner, Money Magazine, October 2002.

Private Investment for Social Goals and the Blended Value Capital Market
(Discussion draft based on The Investors Toolkit by Jed Emerson, Timothy Freundlich and Shari Berenbach) Shari Berenbach and Jacqueline Khor, September 2004.

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Mission-Related Investing

New Strategies for Leveraging Foundation Assets: There are many options, and the choices can seem overwhelming at times.
James P. Joseph and Andras Kosaras, Arnold and Porter LLP. July/August 2008.

Philanthropy’s New Passing Gear: Mission-Related Investing – A Policy and Implementation Guide for Foundation Trustees
February 2008 by Rockefeller Philanthropy Advisors
A practical publication that can inform decisionmakers in philanthropy about how to move forward and implement an agenda for MRI in their institutions. With this guide, plus other research that has been collected on MRI, there is now a strong body of work that can provide donors, trustees, staff of foundations, and the tax, legal and financial advisors that support them, with the data and advice they need to add this component to the mission and work of their foundations.

Aggregating Impact: A Funder's Guide to Mission Investment Intermediaries
October 2007 by Mark Kramer and Sarah Cooch, FSG Social Impact Advisors
This report provides a guide to mission investment intermediaries, organizations that collect capital from multiple sources and reinvest it in people and enterprises, whether nonprofit or for-profit, that deliver both social impact and financial returns. A growing number of foundations and other funders are beginning to use such intermediaries versus making mission investments directly. This is due to a number of advantages that intermediaries can provide, such as ease of investment, reduced risk, lower transaction costs, specialized expertise, performance reporting, and an expanded deal flow. The authors provide an overview of mission investment intermediaries and how foundations use them, the benefits and challenges of investing in intermediaries, and an analysis of available intermediaries that address economic development, housing and the environment. Attached is a spreadsheet of intermediaries according to their program interests, in the hope that this information will be helpful to foundations interested in finding intermediaries that address their program goals and geographies.Mission Investment Intermediaries

Handbook on Responsible Investment Across Asset Classes
The Institute for Responsible Investment, Boston College Center for Corporate Citizenship, November 2007. A new handbook on responsible investing provides the blueprint for foundation asset managers interested in multiplying their organization’s impact on society through options that link mission with investments that create long-term value to society. As investment in alternative asset classes (real estate, private equity, hedge funds, etc.) and the importance of diversification become increasingly accepted by pension funds, money managers, university and foundation endowments, and others, a question arises: How can investors identify and incorporate social and environmental information across their portfolios?

Case Study: Expanding Philanthropy -- Mission-Related Investing at the F.B. Heron Foundation
June 2007. Prepared by the Southern New Hampshire University's School of Community Economic Development, this case study explores the details of the F.B. Heron Foundation's rationale, exploration, and implementation of its mission-related investment strategy, and reviews the tools (including PRIs), specific investments, interim outcomes, and lessons learned.

Compounding Impact: Mission Investing by US Foundations
March 2007 by Sarah Cooch and Mark Kramer, FSG Social Impact Advisors
This study offers the first comprehensive look at the landscape of mission investing by US foundations. Mission investing – the practice of using financial investments as tools to achieve a foundation’s mission – is gaining momentum among US foundations. Mission investments’ annual growth rate averaged 16.2% in the last five years, compared to just 2.9% during the preceding 32 years. Over the past decade, the number of foundations engaging in mission investing has doubled, and the new funds invested annually have tripled.

Foundations and Mission-Related Investing
Stephen Viederman, August 2002. From The SRI Advantage: Why Socially Responsible Investing Has Outperformed Financially. Pages 205-212. Peter Camejo, author and editor. Gabriola Island, British Columbia, Canada: New Society Publishers.

Mission-Related Investing: Strategies for Philanthropic Institutions
Prepared by Investors' Circle for Northwest Area Foundation, 2001.

Mission-Related Investing: A Workshop for Foundations
Investors' Circle, 2003.

New Frontiers in Mission-Related Investing
Luther M. Ragin, Jr., The F.B. Heron Foundation, 2004.

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Getting Started

Leveraging Your Assets with Loans and Other Program Related Investments (PRIs), published November 2007 by Association of Small Foundations (ASF). Small foundations are using PRI loans and other investments to enhance the power of their grantmaking, build capacity, and leverage the impact of their assets. Visit ASF Bookstore ($10 for ASF members, $15 for non-members) or contact Janice Simsohn Shaw

Program-Related Investments: A User-Friendly Guide
David S. Chernoff is Associate General Counsel of the Chicago-based John D. and Catherine T. MacArthur Foundation. This article was adapted from a speech delivered at the 2005 Annual Conference of the Council on Foundations in San Diego, California. (The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of the MacArthur Foundation.)

Program-Related Investments: More Complicated Than Grants, But Worth Considering
Robert Jaquay in Shelterforce Online.

A Basic Guide to Program-Related Investments
Christie I. Baxter, 1997.

Matching Program Strategy and PRI Cost
Frances Brody, John Weiser, Scott Miller, Phyllis Joffe (editor).

Money Matters: The Structure, Operation and Challenges of Nonprofit Funding
Jed Emerson and Paul Carttar, The Bridgespan Group, January 2003.

Should We Consider a PRI? Basic Program-Related investment Criteria for Foundations and Nonprofit Organizations
Frances Brody, Christa Velasquez, 2002.

Where Money Meets Mission: Breaking Down the Firewall Between Foundation Investments and Programming
Jed Emerson, Stanford Social Innovation Review, Summer 2003.

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Emerging Trends

Capital With a Conscience: Private foundations must distinguish carefully their
investments’ purpose, character and strategy.
Jane M. Searing, Clark Nuber PS. 2008.

Lawmakers Unveil the L3C, a New Vehicle for Socially Responsible Investing January 2008. Legislation has been introduced in both houses of the Vermont Legislature aimed at stimulating socially beneficial investment in Vermont and around the country. If enacted, the bills would allow for the creation of a new form of Limited Liability Company (LLC), known as the L3C, to enable non-profits and businesses to pool their resources to make socially beneficial investments. Robert Lang, President and Chief Executive Officer of the Mary Elizabeth and Gordon B. Mannweiler Foundation, has been promoting the use of L3C as a vehicle to promote the effective use of PRIs for a number of years. For more information, contact John Hollar, Director, Downs Rachlin Martin PLLC, 802-225-5500.

Mission Investing in Microfinance
Toolkit by Silk, Adler & Colvin (law firm specializing in non-profit organizations, San Francisco) and MicroCredit Enterprises, 2007.

Capital Structure Counts
Nonprofit Finance Fund, 2002.

Creating Capital, Jobs and Wealth in Emerging Domestic Markets
Glenn Yago, Betsy Zeidman and Bill Schmidt, Milken Institute, 2003.

Current Practices in PRI
Frances Brody, Kevin McQueen, Christa Velasquez, John Weiser, 2002.

The Double Bottom Line: Investing in California’s Emerging Markets
Philip Angelides, May 2000.

Five Years Later: Delivering on Both Bottom Lines
Philip Angelides, August 2005.

Foundations and Real Estate
Funder's Network for Smart Growth and Livable Communities, 2004.

Investing for Impact: Managing and Measuring Proactive Social Investments
Prepared for the Shell Foundation by Mark Kramer and Sarah Gooch, Foundation Strategy Group. January 2006.

Market-Based Solutions for Financing Philanthropy
Arthur Wood and Maximillian Martin, UBS Philanthropy Services, Philanthropy Forum 2006.

Minorities and Venture Capital: A New Wave in American Business
Timothy Bates and William Bradford, Kauffman Foundation, 2003.

New Directions in Fiduciary Responsibility
Stephen Viederman. CCH Incorporated Newsletter, 2003.

New Pathways to Scale for Community Development Finance
Gregory A. Ratliff, Kirsten S. Moy, December 2004.

RISE Capital Market Report
Catherine H. Clark, Josie Taylor Gaillard, 2003.

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