Our Strategy

In addition to its grantmaking, the Foundation makes program-related investments (PRIs), which are low-cost loans and equity investments provided at below-market rates to support charitable activity. Most of the Foundation's PRIs are used to support specialized intermediaries known as Community Development Financial Institutions (CDFIs), and to support Window of Opportunity, a $150 million grant and PRI initiative designed to help preserve affordable rental housing across the country.


In addition to our regular grants, the MacArthur Foundation makes program-related investments, or “PRIs.” PRIs are a hybrid: like grants, they fund charitable purposes; like an investment or loan, they must be repaid and provide a financial return through interest or appreciation. We use PRIs to help nonprofits, government and businesses attract the investment capital they need to achieve important social goals, like building affordable housing, creating jobs and providing high-quality child care in low-income communities. Specifically, by providing funds at a below-market rate of return and accepting higher levels of risk, foundations can use PRIs to leverage funds from ordinary investors who might otherwise be deterred by short-term market conditions, a lack of relevant data or experience, high transaction costs, or limited financial return.


PRIs were created by changes to the federal tax code in 1969. They may be made in the form of loans, equity investments, bank deposits, or guarantees. Like grants, PRIs must support organizations, projects, or commercial ventures that fulfill an IRS-recognized charitable purpose. PRIs count as part of a foundation's qualifying charitable distributions (or payout) in the year in which they are disbursed. Unlike grants, PRIs are repaid to the donor and usually provide a modest rate of return through interest or appreciation.

MacArthur has been using PRIs to expand the reach of its grantmaking programs and to enhance its philanthropic impact since 1986 and has provided more than $400 million in PRIs to date. During the early years of this program, PRIs were made in conjunction with many different Foundation programs, including conservation, education, affordable housing, women’s health, and independent media. Many early PRIs went to Community Development Financial Institutions (CDFIs). CDFIs expand economic opportunity among low-income people and communities by providing affordable financial products and services. Our PRI loans have helped these institutions attract hundreds of millions of dollars in additional capital from banks, pension funds, and social investors. Following a comprehensive evaluation of the PRI program in 2000, we decided to increase our use of PRIs and to limit their use to a few areas of major grantmaking interest . Today, our active PRI portfolio totals nearly $300 million. These investments are being used to:

  • stimulate large-scale practical results
  • inform our understanding of market and policy challenges
  • promote lasting systemic change.

Almost half of our current PRI portfolio supports the Foundation’s $150 million Window of Opportunity housing preservation initiative. In 2007 we completed a year-long strategy review of the CDFI field, which led to our largest PRI ever: a $25 million loan to create the NEXT Awards for Opportunity Finance, a five-year program conducted in partnership with the Opportunity Finance Network and the Wachovia (now Wells Fargo) Foundation. In 2008 we collaborated with our colleagues in the Foundation’s Community and Economic Development program area to design and implement a special Foreclosure Prevention and Mitigation Project focused on Chicago.

Our Strategic Approach

Over the past decade, we have used PRIs to pursue three programmatic objectives: to increase the number of top-tier CDFIs; to preserve affordable rental housing in Chicago and nationally; and to advance community and economic development in Chicago, including public housing transformation and foreclosure prevention and mitigation. To meet these goals, we use PRIs to: provide capital to intermediaries that finance real estate projects serving low-income people and communities, such as subsidized child care centers or apartments for low-income people; leverage capital from other public and private institutions by providing added loss protection through cash or guarantees; demonstrate the viability of underserved markets, new financial products, or emerging enterprises by engaging in transactions that ordinary investors consider too new or risky; and make long-term “bets” on promising organizations with good potential for growth by providing capital for added staff, upgraded systems or new activities.

Grantmaking Priorities

Over the next four years, we expect $40 to $50 million in PRI principal repayments. A significant share of these funds will be used to expand our Window of Opportunity rental housing preservation initiative by deepening our investment in energy-related improvements that enhance the long-term affordability of existing rental buildings while also reducing the carbon “footprint” of the nation’s residential housing stock. We will develop a new 10-year strategic framework to guide our PRI activity in coming years.


To track the financial, organizational, and programmatic progress of PRI recipients, we use expert consultants and third-party resources such as the CDFI Assessment Rating Service, Calvert Social Investment Foundation, and PolicyMap, which is conducting annual surveys of the 40+ practitioners supported through Window of Opportunity. Formal evaluation and assessment of Foundation PRIs has included: * a comprehensive, formal evaluation of the PRI program’s first 15 years (2000); * an assessment of conservation-oriented PRIs made during the 1990s (2003); * a strategic review of the CDFI field (2006); and * an early look at the impact of the NEXT Awards for Opportunity Finance (2011). Upcoming projects include a review of our investment in a dozen Community Development Venture Capital Funds that now have reached the 10-year mark, an assessment of the package of PRIs we awarded immediately after Hurricane Katrina in 2005, and a set of evaluations and assessments that will examine the impact of the Window of Opportunity initiative, now in its 10th year.


Updated December 2012

Information Sheet

For additional resources, please download our full Program-Related Investments information sheet.

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Portrait of Julia M. Stasch

Julia M. Stasch

Vice President, U.S. Programs
Portrait of Debra Schwartz

Debra Schwartz

Director, Program-Related Investments
Portrait of Allison Clark

Allison Clark

Associate Director of Impact Investing

Marion Goldfinger

Program Assistant
Portrait of Beth Gutelius

Beth Gutelius

Research Assistant
Portrait of Louise Powell

Louise Powell

Staff Assistant