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Demystifying Program-Related Investing: Lessons from Recent Adopters
From the Social Finance Institute
The Social Finance Institute, Papers
Key Takeaway
Demystifying Program-Related Investing: Lessons from Recent Adopters is produced through a partnership between the Social Finance Institute, the Impact Investing Research Lab at the Impact, Value, and Sustainable Business Initiative at the Wharton School, and the Center for High Impact Philanthropy at the University of Pennsylvania.
Overview
Program-related investments (PRIs) enable foundations to provide loans, equity capital, and other return-generating financing that prioritizes social mission over financial performance. Existing research has thoroughly documented barriers to PRI adoption, including resource constraints and cultural resistance, but the focus on obstacles obscures an important reality: Some foundations have successfully integrated PRIs into their philanthropic practice, and many have done so recently.
What distinguishes these recent adopters? How did they navigate challenges that deter so many of their peers?
This research distills lessons from 36 U.S. foundations that began making PRIs between 2016 and 2023, translating their experiences into practical guidance for foundations considering this transition. The project documents a more nuanced reality: PRIs are not inherently difficult; rather, foundation experiences vary dramatically based on factors that organizations can deliberately manage. Success depends less on organizational size or sophistication than on deliberately managing complexity, capacity, and congruity.
By demystifying PRI adoption while respecting its genuine challenges, this research helps more foundations find their own path toward successful implementation.
To learn more, contact us.
About the Author
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Michael Brown
Research Director, Impact Investing Research Lab at Wharton Impact
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Michael Brown is the Head of Research at Wharton Impact, where he manages research on impact investing, corporate responsibility, and social enterprise. His responsibilities include planning studies on the business of social impact, data collection and analysis, synthesizing and disseminating findings, and consulting on impact assessment. Michael came to Wharton from the University of Chicago, where he completed a PhD in Sociology and served as a consultant to nonprofits on Chicago’s South Side. In his spare time Michael enjoys trying to learn how to be handier around the house, with usually mixed results.
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