While most foundations make grants to support their programmatic interests, some funders also use alternative forms of financing to supply capital to the nonprofit sector. Taking the form of loans, loan guarantees, and other investments made for charitable purposes, program-related investments (PRIs) are commonly used to support community revitalization, low-income housing, micro-enterprise development, historic preservation, human services, education, church renovations, and many other types of projects.

Just published by the Foundation Center, The PRI Directory: Charitable Loans and Other Program-Related Investments by Foundations reports that PRI distributions from U.S. foundations topped $266 million in 1999, up from $147 million in 1997. But while the level of PRI financing has grown dramatically, the number of "active" funders has remained fairly steady since the mid-1990s.

The PRI Directory also includes an analysis of PRI trends based on a sample of 133 leading PRI providers. Among key findings, Community Development retained the largest share of PRI support, while the share for housing declined. By comparison, PRI financing increased for educational institutions — nearly 15 percent of all PRI dollars supported education in 1998-1999, compared to less than 5 percent as recently as 1993-1994. The share of PRI support also increased in the late 1990s for health, the arts, and the environment, while decreasing slightly for human services and church support. Approximately half of PRI dollars in the sample were for capital projects — building, renovation, and equipment (36 percent) and other capital projects (15 percent), while the share of PRI dollars for non-capital special projects and programs jumped to one-third by mid-decade, up from only 16 percent earlier in the decade.

To download a copy of the trends report from the new directory (16 pages, PDF), visit: http://fdncenter.org/research/trends_analysis/pdf/01pri_ex.pdf.