Private foundations have many tools that can be used to make an impact in the communities they serve besides making grants. A Program Related Investment (PRI) is one such tool. PRI’s provide innovative opportunities to maximize funds and partner with community organizations to advance foundation’s missions as well as the missions of the organizations.
PRI’s are below market, low interest collateralized loans. Washington Square Health Foundation’s PRI’s repayments are in the form of one payment (principal and interest) due each year. The typical duration of a PRI is five years. Collateral can be in the form of land, building, equipment, securities, escrow account, etc. PRI’s can be used for projects outside of Washington Square Health Foundation’s normal funding guidelines (such as construction, cash flow, land acquisition, etc.)
The benefits of PRI’s also extend to the recipient. To manage a PRI, many organizations must implement a more strenuous financial management system. Organizations will continue to reap the benefits of these systems long after the PRI has been repaid. Additionally, PRI’s are often given to organizations or projects that are considered too risky for the commercial markets. Groups can use a PRI to establish a positive credit rating, making them eligible for larger, traditional loans.
How to Apply for a Program Related Investment
- Call or email Catherine Kapella, Executive Director, to discuss your organization’s “project” idea. Contact information can be found here; and
- Follow the WSHF application procedure found here, indicating that your request is for a PRI.
Examples of Program Related Investments
- Zacharias Sexual Abuse Center (formerly known as LaCASA ).The Washington Square Health Foundation granted a PRI together with in-kind staff consulting, to help Zacharias Sexual Abuse Center acquire land and a new building to house the organization’s services to sexually-abused children, women and their families.The Foundation made a PRI at a below-market rate of interest to be repaid in full by Zacharias Sexual Abuse Center through funds received from individual contributors, foundations and other sponsors. Howard Nochumson, Executive Director, also worked closely with Zacharias Sexual Abuse Center’s Executive Director and board to advise them on launching a major capital campaign that ultimately garnered over $1.5 million. Finally, the Foundation combined its PRI with a traditional grant to establish a training center in the new facility. As a result of their partnership, Zacharias Sexual Abuse Center gained a greatly improved facility, expanded the services it provided to the community, and reduced the costs of those services. (Read more here).
- PCC Community Wellness CenterIn 2009, the Washington Square Health Foundation granted a Program Related Investment (PRI) to PCC. Through this valuable partnership with Washington Square Health Foundation, PCC was able to begin the implementation process for an Electronic Health Records (EHR) system. In April 2009, PCC joined the movement towards EHR implementation to promote accessible, continuous and coordinated family-centered care with the support of health information technologies. The EHR and Practice Management system of choice for PCC was GE Centricity. GE Centricity is the first EHR to be certified by the National Committee of Quality Assurance. (Read more here).
- The Alliance of ChicagoWith generous Program Related Investments (PRI) from the Washington Square Health Foundation the Alliance is able to better serve the members of its growing network of CHCs that now represent 32 health centers with over 100 service delivery sites in 11 states. All member CHCs are Safety Net Providers who serve a diverse, underserved set of populations, including rural, urban, uninsured, poor, minority, non-English speaking, elderly and homeless.As the Alliance network members grew so did the Alliance staff. One PRI addressed the needs of the growing Alliance staff and provided an environment better suited to serving the Alliance network members. In addition to more space these resources provided, for the first time, dedicated meeting and videoconference space, and semi-private space for training and technical assistance calls with CHCs.A second PRI supported the improvement of the technological environment for the HIT. These resources were used to purchase servers and server racks, hard drives and flash cards and server switches. These purchases doubled the Alliance’s virtual storage capacity to accommodate the growing needs of existing network members and the ability to add new CHCs to the network. (Read more here).
Reporting for Program Related Investments
- The first year’s reporting guidelines are the same as a WSHF grant (found here)
- An annual report updating WSHF on the progress of the project is due each year the loan is outstanding.