Foundations usually pursue their philanthropic goals either by managing programs themselves or by making grants to enable other institutions to establish and operate programs. In 1968 the Ford Foundation added a third mechanism called program-related investments (pris), which are usually loans but may also be loan guarantees or equity investments. They are earmarked for investment in enterprises that advance the Foundation's program interests. The pri office, therefore, works closely with the Foundation's program division.

The distinguishing feature of pris is that they are recoverable. As such, they enlarge the Foundation's philanthropic resources. Since 1968, funds allocated for pris by the Foundation's trustees have increased from $10 million to $130 million.

pris involve a greater degree of risk and pay a smaller return than conventional investments. But they also help recipients attract other sources of financing, private as well as governmental, develop financial experience, and accumulate assets and produce income to sustain their operations. The primary considerations for making a pri are its fit with the Foundation's program goals and likelihood of principal repayment.

pris provide funds for such projects as the rehabilitation of low-income housing, the revitalization of run-down neighborhoods, and the creation of jobs for the unemployed. The pri office often complements a loan or investment with an "equity grant," which enables a nonprofit organization to increase its equity investment in a pri-supported project. The office also provides modest grants for research and for technical assistance to help nonprofit organizations plan a venture for possible pri financing or solve problems associated with an existing pri. In addition, the pri office also uses grants for research on institutions that engage in social investing and to explore ways the Foundation might facilitate such investing.

Since the Foundation's first program-related investment in 1968, 239 pris have been approved. Commitments for nineteen have been withdrawn, leaving 220 totaling almost $182 million. Of total commitments, $66.4 million has been repaid and $16.03 million written off. At the end of fiscal year 1990, 125 investments were active, with outstanding pri balances or unfunded commitments of $99.1 million, leaving an uncommitted balance of $30.9 million.

During 1990, nine pris totaling $14.75 million were approved, of which $11.25 million will finance projects in the United States and $3.5 million will support projects in Africa and Latin America. As in prior years, pris were concentrated in two programs—Urban Poverty and Rural Poverty and Resources. Also during 1990, the pri office made five equity grants totaling $750,000, three research, planning, and evaluation grants totaling $89,000, and one grant of $132,837 to explore the use of social investments by other institutions and to encourage expansion of this activity. Following is a summary of pri activity in 1990.