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: The Center for Applied Philanthropy : Working to Overcome Barriers
Working to Overcome Barriers
CAP believes that 'nontraditional' capital - structured as Program Related Investments (PRIs) - represents a much under-utilized tool for more sustainable funding that is even more critical to understand and implement - given today's dual challenges of reduced assets of funders and increasing needs in society.
That said, despite increasing interest in PRIs and other mission investing strategies - the amount of capital committed to mission investing still remains quite small.. Although PRIs have existed for years and several foundations have utilized and advocated the advantages of these investments - PRIs have still not been adopted or utilized by the vast majority of philanthropic organizations - despite their enormous potential to leverage philanthropic capital. increase programmatic impact, and strengthen investees management and finances.
CAP is committed to overcoming the perceived barriers to incorporating PRI investments, and we are actively working with foundations, families, individuals, and nonprofits to work through these challenges, including:
--- Barrier #1: Many foundations and donors perceive that they lack the skill set to evaluate the credit worthiness of grantees that a PRI would require: Many foundations perceive they lack the financial, legal and program skills required to make PRIs. CAP works with funders to develop the necessary technical and financial skills to structure, implement and manage PRIs. CAP also works with nonprofits to evaluate their financial health, discipline and commitment to manage a PRI and work with them to think through and develop the appropriate capacities
--- Barrier #2: Most foundations and nonprofits still prefer grant dollars to debt or other "nontraditional" investments: As a vehicle, many foundations and non-profits remain dependent on traditional grant making despite the enormous opportunity to leverage the programmatic activities of non profits through more innovative financing. CAP works with its clients to demonstrate the increased impact of utilizing mission investments and the ability to further leverage precious philanthropic capital
* FSG Social Impact Advisers
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