Saturday, August 25, 2007

Program Related Investments

Social capital formation is a hot topic for me. I want to see us have the same kind of positive environment for social ventures as we have in Silicon Valley for high tech ventures (but they have to make a lot of money), where great social ventures are rewarded with better and lower cost capital.

An under-used tool for foundations is the program-related investment (PRI). PRIs are supposed to be for mission (program) reasons first and financial return second (although you can make a return). One concern about PRIs that I've seen is the high cost of doing them: you have to spend a lot of time and legal fees structuring the transaction.

That's why I was glad to see MicroCredit Enterprises and Silk Adler & Colvin release the Program Related Investment (PRI) Primer and Toolkit. It explains a complicated topic well. Plus, they are encouraging other people to use their materials:
In the spirit of partnership, MicroCredit Enterprises offers this Primer and Toolkit into the public domain for informational purposes. No copyright claim to this booklet or its contents is made, provided acknowledgement is given to MicroCredit Enterprises and/or the authors and provided that this material is not reproduced for sale.

So, I hope this will become a trend, to give program investors more tools to do PRIs and lower their transaction costs. And, hopefully, that will lead to more capital for great social ventures!

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