Program-Related Investments (PRIs)
Below-market, mission-aligned capital from foundations that backs your impact without taking your equity.
What is Program-Related Investments?
A program-related investment, or PRI, is capital that a charitable foundation invests in your company to advance a social or environmental mission. Because the foundation's main goal is impact rather than profit, the money usually comes on better-than-market terms, most often as a low-interest loan.
PRIs come from the US tax code. Under IRS rules, a private foundation can make a PRI when the primary purpose is charitable, earning income is not a significant motive, and it is not used for lobbying or politics. PRIs count toward the foundation's required annual charitable payout, which gives foundations a real incentive to make them. Similar impact-first capital exists worldwide through community development finance institutions, impact funds, and mission-driven lenders.
For a founder, a PRI can mean patient, low-cost money that a bank would not offer, often paired with the credibility of a respected foundation's backing. The trade-off is that your business has to genuinely advance the foundation's mission, and these deals take time and relationships to close.
How it works
- 1Show clear mission alignment. PRIs only flow to companies whose work advances a foundation's charitable goals, such as climate, health, financial inclusion, or housing.
- 2Find the right foundation or impact lender. Larger foundations (for example Ford, MacArthur, Kresge, and Gates) run PRI programs, and many community and regional funders make mission investments too.
- 3Agree on structure and terms. PRIs are most often below-market loans, but can also be loan guarantees, linked deposits, or equity. Interest rates have historically ranged from zero to near market, usually below.
- 4Report on impact. Because the capital is tied to a charitable purpose, you will typically commit to tracking and reporting the social or environmental results alongside financial performance.
Why founders use it
- Below-market cost, with interest often well under what a bank or fund would charge.
- Patient and flexible, with terms shaped around your mission rather than a rigid credit box.
- Mostly non-dilutive when structured as debt, so you keep ownership.
- The backing of a credible foundation can validate your company to other funders.
- Available to mission-driven businesses that traditional lenders often see as too risky.
Best for
- For-profit startups with a genuine, measurable social or environmental mission.
- Climate, health, education, housing, and financial-inclusion companies that match a foundation's focus area.
- Founders who can commit to impact reporting and have time to build funder relationships.
Things to weigh
- Mission fit must be real. PRIs are not general startup capital and only suit companies whose work advances a charitable purpose.
- Deals are relationship-driven and can take months to source and close.
- You will usually take on impact-reporting obligations.
- Some PRIs are structured as equity rather than debt, which would be dilutive, so confirm the structure before you sign.
Typical terms at a glance
- Typical amount
- Varies widely by funder, commonly from tens of thousands to several million dollars, often as a multi-year loan.
- Cost / terms
- Below-market, frequently a low-interest loan (historically anywhere from 0% to near market). Mostly non-dilutive, though some are structured as equity.
Ranges are general guidance for orientation, not quotes. Real terms vary by provider, country, and your profile.
How Grantverse helps with program-related investments
Grantverse looks at your mission, sector, and stage, estimates whether PRIs are a realistic fit, and surfaces foundations and impact lenders whose focus areas match yours, with honest likelihoods rather than a generic list.
Frequently asked questions
What is a program-related investment?
A PRI is an investment a charitable foundation makes to advance its mission, usually as a below-market loan to a company whose work furthers a social or environmental goal. The foundation prioritizes impact over financial return.
Are PRIs the same as grants?
No. A grant is money you do not repay. A PRI is capital, most often a loan, that you are expected to repay (typically with low interest), though on far friendlier terms than a commercial lender would offer.
Do I have to be a nonprofit to receive a PRI?
No. Foundations can and do make PRIs into for-profit companies, as long as your work genuinely advances the foundation's charitable purpose. The structure must satisfy the foundation's own legal requirements.
Are PRIs dilutive?
Usually not. Most PRIs are loans or other debt-like instruments, so you keep your equity. Some are structured as equity investments, which would be dilutive, so always confirm the structure up front.
How do I find foundations that make PRIs?
Start with foundations active in your mission area, plus community and regional funders and impact lenders. Many large foundations publish their program areas, and matching your mission to a funder's stated focus is the key to a real conversation.