Loans are good, but equity is better. Loans and other debt instruments account for the vast majority of PRIs; recipients welcome these investments, but many wish foundations would make more equity investments. “I think that the best opportunity to use PRIs is through equity investing,” said one PRI recipient, “especially for things that have a very difficult time getting capitalized through traditional means.” Equity provides more flexibility, he continued, particularly for start-up ventures, regulated financial institutions, and businesses in unproven markets.
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This takeaway was derived from Program-Related Investing.