While most foundations support organizations by providing grants, some grantmakers also provide program-related investments (PRIs) in the form of loans or loan guarantees to finance charitable projects. While the number of foundations that make PRIs is relatively low, more foundations are using PRIs to support various initiatives, including community development projects.
In the April 2008 issue of Trusts & Estates, David T. Leibell and Daniel L. Daniels explain that there may be a new way for foundations to make these social investments and to practice venture philanthropy. It involves a new legal entity, the low-profit limited liability company (L3C), which can seek PRIs and raise funds from private investors as well. The article, “Say Hello to the L3C" indicates that a few states are considering legislation that would authorize the entities, including North Carolina and Vermont.
If you would like to learn more about PRIs or L3Cs, try exploring the links below:
The Foundation Center’s FAQ “What Is a Program-Related Investment?"
PRI Makers Network (for grantmakers)
Americans for Community Development (a coalition that promotes the L3C)
You can also search the Catalog of Nonprofit Literature by using the subjects Program-Related Investments or Venture Philanthropy.
