In the ever-evolving landscape of social impact, one of the most interesting changes that we believe is the future of social impact models and investing is accountability. Traditional models of relying solely on fundraising are gradually giving way to innovative approaches that prioritize accountability of their impact and long-term sustainability. One such approach gaining traction is Program-Related Investments (PRI) – a powerful tool empowering foundations to invest in accountable and sustainable nonprofit or impact funds, fostering a cycle of impact that benefits all parties involved.
Gone are the days when nonprofits were solely reliant on sporadic grants and donations to fuel their missions. While these contributions have undoubtedly been essential, they often leave the giving foundation wondering what their impact was and receiving organizations grappling with uncertainty and the perpetual need to secure funding. The shift towards PRI investing heralds a new era, one where nonprofits innovate to create sustainable models for social change and can break free from the shackles of perpetual fundraising.In the quest for social impact, few issues resonate as deeply and universally as housing affordability. Across the globe, communities grapple with the challenge of ensuring that every individual has access to safe, stable, and affordable housing. As we explore the transformative potential of Program-Related Investments (PRI) in driving sustainable change, it's imperative to examine how this approach intersects with the pressing issue of housing affordability.
What is PRI? Giving foundations are required to give 5% of their total assets every year. Instead of only giving grants, they can choose to do Program Related Investments that qualify as part of their annual giving. PRI investments receive a lower than market return for the foundation, while keeping them involved in their impact investments. This keeps social good organizations that receive PRI accountable for their impact and requires them to find a sustainable model. At the end of an initial holding period the giving foundation can choose to grant their investment, or move it to another nonprofit organization of their choosing.
At its core, the concept of PRI investing embodies the principles of accountability and sustainability, making it an ideal tool for addressing complex social challenges such as housing affordability. By channeling financial resources into initiatives that prioritize long-term impact, foundations can play a pivotal role in fostering lasting and sustainable social impact organizations.
One shining example of PRI investing making a tangible difference in the realm of housing affordability is the Utah Housing Preservation Fund. Established as a collaborative effort between philanthropic organizations, government agencies, and private investors, this innovative fund seeks to preserve and enhance affordable housing options across the state of Utah.
The Utah Housing Preservation Fund operates on the premise that preserving existing affordable housing stock is just as crucial as developing new units. Through strategic investments in the acquisition, rehabilitation, and preservation of affordable housing properties, the fund aims to prevent displacement of tenants, stabilize neighborhoods, and ensure that low-income individuals and families have access to safe and affordable housing options.
What sets the Utah Housing Preservation Fund apart is its utilization of PRI investments to achieve its mission. By leveraging PRI capital from foundations and other impact investors, the fund can deploy flexible financing mechanisms that align financial returns with social impact outcomes. This innovative approach not only maximizes the effectiveness of philanthropic dollars but also catalyzes additional investments from traditional lenders and other stakeholders. All investors help hold the Fund accountable and receive regular performance and social impact updates.
Moreover, the Utah Housing Preservation Fund exemplifies the collaborative spirit that underpins successful PRI initiatives. By bringing together diverse stakeholders from the public, private, and nonprofit sectors, the fund fosters cross-sector partnerships that drive collective action towards a common goal. Thanks to this approach, the Fund could be structured as an evergreen fund. This means, the Fund aims to own and operate its acquired properties perpetually.
As we navigate the complexities of housing affordability, PRI investing emerges as a potent tool for effecting positive change. By prioritizing accountability, sustainability, and collaboration, initiatives like the Utah Housing Preservation Fund demonstrate how PRI investments can empower communities, strengthen social infrastructure, and create lasting value for generations to come. As we look to the future, let us embrace the transformative potential of PRI investing as we strive to build a world where housing affordability is not just a dream but a reality for all.