Economics of PRIs for private foundations

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Significant multi-generational economic benefit

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By recycling grant money, PRIs have the potential to significantly increase a foundation’s charitable impact

• Multiplier effect allows more distributions without eroding endowment
  
• Stay relevant for decades despite distributing at least 5% every year
  

PRIs are not assets

• Since they do not factor into the minimum distribution, they do not affect liquidity 
  
• Asset base only rises when there are realized positive returns
  
• They do not factor into fiduciary/“prudent investor” concerns (risk, diversification, illiquidity)
  

Any positive realized returns have “alpha” impact on portfolio

The impact on long term distributions

The long term portfolio impact