Publications, Articles and Transcripts

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

No private foundation should dismiss the concept of PRIs out of hand-- and neither should many public charities. Review the pros and cons, the risks and rewards, of PRIs in this article,
Program-Related Investments and You- Perfect Together? to learn what is involved in considering a PRI.

Maximizing Impact: An Integrated Strategy For Grantmaking and Mission Investing in Climate Change provides a framework for foundations to identify the different ways social challenges, particularly climate change, may be addressed through a combined approach of mission investments and grants.

The Foreclosure Opportunity- Re-Imagining Urban Landscapes
The PRI Makers Network Annual Conference hosted a session on “Foreclosure Mitigation: PRIs as a Rapid Response Tool.” Here PRI Makers Network consultant, Kim Martin, writes for the Conference Blog about the session and the impact of program-related investments in neighborhood stabilization programs.

Comments On Proposed Additional Examples on Program-Related Investments. These comments represent the views of the American Bar Association Section of Taxation. They have not been approved by the Board of Governors or the House of Delegates of the American Bar Association, and should not be construed as representing the policy of the American Bar Association.

Presentations from "Financing to Promote Sustainable Fisheries teleconference" are now available. Jointly hosted by PRI Makers Network and Sustainable Agriculture and Food Systems Funders, the call featured opportunities to use grants, PRIs and other investments to revive and preserve fisheries while supporting coastal communities. A recording of the call is available through January 7th.

Third Quarter 2009 CDFI Market Conditions Report is now available online. The report is based on quarterly surveys of community development financial institutions (CDFIs). Each report provides a near-real-time view of market conditions and CDFI responses, and analyses regional and financing sector differences, and trends.

Janet Kawalt, director of Responsible Investing Research at Evaluation Associates explores various approaches to "creating a virtuous circle establishing underserved communities as viable economic entities" in her report on "Community Investing: Opportunities Across Assets." Evaluation Associates provides investment guidance and research on behalf of insitutional investors.

Blueprint R&D Inc and GPS Capital Partners have published a new report entitled Equity Advancing Equity that describes how community foundations are deploying social investments to increase their impact. The paper is part of the Futures Project and is supported by the Charles Stewart Mott Foundation and the Ford Foundation. It builds on the framework outlined in the 2005 report, On the Brink of New Promise: The Future of U.S. Community Foundations. This report, a series of Future Matters reports and a user’s toolkit are all hosted on The Future of Community Philanthropy.

Earlier this year, Community Capital Management (CCM) held a webinar "Green Approaches to Fixed Income Investing: Research, Best Practices, and Opportunities." Given the number of participants on the webinar and investors' increasing pursuit for this type of investment strategy, CCM has prepared a white paper that builds upon the theme of the webinar. Discussed are, how green fixed income investments benefit the environment, review of types of market-rate, fixed income securities that can positively impact the environment, and an overview of how investors can incorporate green fixed income investments into their portfolios. For a complimentary copy of the report, click here.

Community Development Financial Institutions: Challenges and Opportunities
Speech by Federal Reserve Chairman Ben S. Bernanke at the Global Financial Literacy Summit, Washington, D.C. -- June 17, 2009
"...Increased interest by socially motivated individual investors has expanded the pool of investment capital for community development. One CDFI has created a product similar to a mutual fund where individuals purchase "community development notes" that are invested in community development organizations. The fund has raised capital from about 4,700 individuals and invested about $160 million; further, it has performed well, with an average 3 percent rate of return to investors and very low loss rates. Even during the recession, new investors have been drawn by the appeal of supporting low- and moderate-income communities while earning relatively good rates of return..."

As The Economic Crisis Deepens, Socially Oriented Capital Emerges
Robin Hacke, Living Cities, March 2009
The current bear market has led investors to plumb alternative vehicles for their increasingly scarce investment dollars. Although the concept of impact investing is not new, investors are looking more deeply into the possibilities.

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

More for Mission Newsletter
The More for Mission Campaign seeks to grow mission investing activity: an increase in investments totaling 2% of endowments would generate approximately $10 billion more in foundation commitments. To this end, the Campaign is building the necessary tools and knowledge, and facilitating a network of foundations that are committed to advancing mission investing within their organizations and beyond.

Handbook on Climate-Related Investing across Asset Classes
Valerie LaVoie and David Wood, Boston College Institute for Responsible Investment, April 2009
The Handbook is a guide to market-rate investments that take into account climate risk and opportunity. It serves as a tool for institutional investors, consultants, fund managers, high net worth individuals and related parties to design and implement investment strategies that integrate climate risk and opportunity into their investment analysis.

Investing for Social and Environmental Impact
The Monitor Institute, April 2009
A growing group of investors around the world is seeking to make investments that generate social and environmental value as well as financial return. This emerging industry of impact investing has the potential to become a potent force for addressing global challenges. But how might it succeed or fail? Will it take the next five to 10 years? 25 years? Or will it not happen at all? This report examines impact investing and how leaders could accelerate the industry's evolution and increase its ultimate impact in the world. It explores how impact investing has emerged and how it might evolve, including profiles of a wide range of impact investors. The report also provides a blueprint of initiatives to catalyze the industry.

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

The Ford Foundation History of PRIs
Although somewhat dated, this overview provides history and still valid insights on the use of PRIs from the inventor of the strategy.

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. ...As encouragement for foundations to use their assets for philanthropic purpose, the tax code counts the entire amount of a PRI as a qualifying distribution in the year in which it is made (essentially the same treatment afforded grants). These tax provisions have allowed foundations to creatively use their assets in situations where grant making is either inappropriate or insufficient...

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

Program-Related Investing and the Indianapolis Charter Schools Facilities Fund
Annie E. Casey Foundation, 2007
This is an in-depth case study profiling an innovative program-related investment (PRI) designed to stimulate private investment in charter school facilities and support the Casey Foundation’s education reform objectives in Indianapolis.

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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PRI Conference 2010

Click here to view a pdf of the conference program.

Workshops
The conference featured workshops on the following topics:

Getting Started with PRIs

Building Your PRI Craft

Opportunities for Impact: Targeted Uses of Program-Related Investments

Learning Tours

The conference featured learning tours on Tuesday, May 11 from 2 - 5 pm on the following topics:

PRI Conference 2008

For video content of speeches, workshops and other conference sessions, visit ForaTV.

Jonathan Fanton, The John D. and Catherine T. MacArthur Foundation - Closing Keynote
Kathleen Fluegel, The HRK Foundation - Closing Panel
Douglas Kridler, The Columbus Foundation - Closing Panel

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PRI Conference 2006

The Role of PRIs in Creating Scale and Leverage
Frank DeGiovanni, The Ford Foundation Photo
Nancy Andrews, Low Income Investment Fund Speech

The Evolution of PRIs
Luther M. Ragin, Jr., The F.B. Heron Foundation Speech Investment Spectrum Graphic Photo

PRIs Looking Forward
Douglas W. Nelson, Annie E. Casey Foundation Closing Remarks Photo Photo

The Spectrum of Foundation PRI Strategies
Transcript Photo
Robert B. Jaquay, The George Gund Foundation
Patrick Modugno, The Conrad Hilton Foundation
Debra Schwartz, The John D. and Catherine T. MacArthur Foundation
Luther M. Ragin, Jr., The F.B. Heron Foundation Photo

PRIs as a Bridge to the Capital Markets Transcript - PRI Conference 2006
Jacqueline Khor, The Rockefeller Foundation Photo
Jed Emerson, Generation Foundation PPT
Frank Altman, Community Reinvestment Fund PPT
Shari Berenbach, Calvert Foundation PPT

Reflections on Becoming a PRI Funder Transcript
Jeff Clarke, Rasmuson Foundation
Christa Velasquez, Annie E. Casey Foundation

Workshops

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Archives



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