The Power of Impact Investing

Publication date: 
January, 2015

Counted as part of a foundation’s 5 percent distribution requirement, Program Related Investments (PRIs) can effectively recycle grant dollars, grow the endowment to provide additional grant monies for future projects, and provide a foundation’s grantees with significant unrestricted resources. In this 3-minute video produced by the Impact Finance Center (IFC), learn how this tool is helping leading foundations amplify their impact.

Program Related Investments (PRIs) are an impact investing tool specific to foundations. As an alternative to the traditional grant, PRIs can effectively recycle grant dollars, grow the endowment, and provide the investee with significant unrestricted resources. PRIs can be an incredibly effective tool for bringing long-term financial stability to organizations – both investors and investees – while addressing critical social needs. But they’re underutilized, in part, because most foundations aren’t aware of this tool and its range of benefits.

The IFC team and partners have decades of experience in the conception, design and structuring, evaluation and deal execution related to PRIs. Our experience has helped us develop a straightforward and highly effective framework for assisting clients with Program Related Investing. We break the work into five stages:

  • Stage 1: Data Collection and Assessment - allows for internal/external investment data collection and feasibility assessment;
  • Stage 2: PRI Strategy Development - provides an opportunity to deliver PRI-tailored education to Board and staff and articulate PRI goals. It sets the course for sourcing transactions, providing technical assistance, assessing the long-term pipeline potential, and closing transactions; 
  • Stage 3: PRI Pilot Transaction - involves deploying an organization’s resources – both capital and personnel – to achieve PRI objectives;
  • Stage 4: Evaluation - creates a transparent, iterative feedback process to support those managing PRI activities and broader organizational investments; and
  • Stage 5: Scale Program - outlines a pathway for strengthening and expanding an organization’s PRI efforts.
Resource type: