Generation to Generation

It is not often that you can find inspiration within the Treasury regulations. But if you are a family foundation looking for innovative ways of pursuing your charitable mission, you will come away from reading the nineteen examples in the regulations finalized by the Treasury Department last year with a new enthusiasm for program-related investments, known simply as PRIs. The stories these examples tell of the myriad ways PRIs can achieve positive impact will be compelling to many foundations, especially those that have been reluctant to incorporate PRIs into their grantmaking and investment strategies.

Foundations are effective vehicles for families who want to make a collective philanthropic impact now and for generations to come. Traditionally, foundations have achieved this impact solely through strategic grantmaking. A growing number of foundations are looking for ways to go further, however. These foundations seek strategies that will allow them to deploy their investment portfolios – in addition to grantmaking – to advance their charitable missions without hurting the value of their endowments long-term. One such strategy, using “mission-related investments” or MRIs, is trending in the press and at sector conferences, but most foundation directors and trustees have yet to jump on its bandwagon. New guidance from the IRS may change that.