Yes, these are referred to as program-related investments (PRIs). They’re financial tools that resemble loans or investments but are designed to advance a charitable purpose, rather than generate a profit.
Examples include:
- Low-interest loans to help a nonprofit buy equipment or bridge a funding gap.
- Loan guarantees that make it easier for nonprofits to access capital.
- Equity investments in mission-driven enterprises.
PRIs give foundations a way to recycle capital—once the funds are repaid, they can be used again for charitable purposes—while also addressing urgent community needs. It’s philanthropy that blends dollars with strategy.
Learn more in The Foundation Guidebook and our primer, Leveraging Your Assets With Loans and Other Program-Related Investments.
Disclaimer: While we pride ourselves on our advice, please realize Exponent Philanthropy is not a law or accounting firm. The information contained in this Q&A is being provided for informational purposes only and not as part of an attorney-client relationship. The information is not a substitute for expert legal, tax, or other professional advice tailored to your specific circumstances, and may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code. It is our advice that you seek independent counsel for any tax, accounting, or legal issues you may have related to matters that are of a material concern to you or your organization.
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