Program-Related Investments (PRIs): How Foundations Fund Nonprofit Growth
Updated June 2026
Most nonprofit leaders think of foundations as grant-makers and stop there. But foundations have a second, less-visible tool for moving money toward their mission: the program-related investment. For an organization operating at some scale — one that needs growth capital, not just program funding — a PRI can be the difference between staying small and building something durable.
PRIs aren't widely advertised, and they're not right for every nonprofit. But if you have demonstrated impact and a revenue-generating project, they're worth understanding.
What a PRI Is
A program-related investment is an investment a foundation makes in a mission-aligned organization — most often a below-market loan, sometimes equity or a loan guarantee. The defining feature is purpose: the foundation's primary goal is advancing its charitable mission, not earning a market-rate financial return.
Because of that charitable purpose, PRIs count toward a private foundation's required annual payout (the roughly 5% of assets foundations must distribute each year). That's what makes them attractive to the foundation — and what makes the terms attractive to you.
Why Foundations Make PRIs
A grant is spent once. A PRI loan is repaid and can be lent out again — the same dollars recycle into multiple projects over time. For a foundation, this stretches the impact of its required payout while still satisfying the payout rule.
It also lets foundations support things a grant can't easily fund: a capital project, a social enterprise, or a growth initiative that will eventually generate revenue. The PRI structure bridges the gap between pure philanthropy and conventional investment.
How PRIs Differ From Grants
| Factor | Grant | PRI |
|---|---|---|
| Repayment | None | Yes (for loans) — but on very favorable terms |
| Cost of capital | Free | Below-market interest |
| Typical use | Programs, operating costs | Capital projects, social enterprises, growth |
| Counts toward foundation payout | Yes | Yes |
| Relationship required | Sometimes | Almost always |
The short version: a PRI is repayable, but on terms so favorable — below-market interest, flexible repayment, patient timelines — that it often functions like a grant you eventually pay back.
Who Offers PRIs
Large national foundations are the best-known PRI makers — the Ford Foundation, MacArthur Foundation, and Kellogg Foundation among them — and a growing number of community foundations now offer them as well. These names are provided as an educational reference only, not endorsements. Verify current programs directly with each foundation.
PRIs are rarely posted as open application opportunities. Almost all of them originate through an existing relationship with a program officer who already knows and trusts your organization.
What Foundations Look For in a PRI Candidate
- Demonstrated impact — a track record that shows your model works
- Strong financial management — clean books, sound controls, and reliable reporting
- A clear use of funds — a specific, well-scoped project, not a general ask
- Ability to repay — a credible revenue or cash flow path to service the investment
Because a PRI is structured as an investment, foundations underwrite it more rigorously than a grant. They need confidence you can both deliver the mission outcome and meet the repayment terms.
How to Approach a Foundation About a PRI
Lead with relationship, not the deal. Identify foundations that already fund your issue area and geography, and that have made PRIs before. Engage genuinely with a program officer's work, ask for an informational conversation, and frame the project around shared mission and a specific, repayable initiative.
PRIs come out of trust and track record. The organizations that land them are usually ones the foundation has funded — or watched closely — for years. If you're newer, a strong grant relationship is the on-ramp.
Strong Financials Make You PRI-Ready
A foundation underwriting a PRI scrutinizes your financial management closely. Clean, organized books and clear statements are what build the confidence required to make an investment in your organization.
Holdings includes free accounting and bookkeeping for nonprofits and churches. The account keeps your finances organized and easy to document, so when a funder asks for financials, you can answer with clarity instead of scrambling.
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Frequently Asked Questions
What is a program-related investment?▾
How is a PRI different from a grant?▾
Who offers PRIs?▾
What do foundations look for in a PRI candidate?▾
How do I approach a foundation about a PRI?▾
Informational only — not financial, legal, or tax advice. Holdings is a financial technology company, not a lender; we do not offer loans, grants, or financing products. Foundation names are referenced for educational purposes only and are not endorsements. Verify all terms and eligibility directly with each foundation.