NEO Managing Attorney Gene Takagi wrote this article on the new final regulations on program-related investments that will hopefully stimulate this alternative form of philanthropy.
Final regulations concerning program-related investments (PRIs) were published and made effective on April 25, 2016, providing private foundations with additional varied examples of how they can use PRIs to further their charitable missions. While PRIs are vastly underutilized, many commentators believe recent changes in how the law is administered will encourage more use of PRIs and change the competitive playing field for philanthropic dollars.
Read the full article here.
Program-Related Investments (4/21/16), IRS
Strategies to Maximize Your Philanthropic Capital: A Guide to Program Related Investments (April 2012), Mission Investors
Internal Revenue Code §4944 - Taxes on investments which jeopardize charitable purpose
Treasury Reg. §53.4944-3 - Exception for program-related investments
Treasury Reg. §53.4945-5 - Grants to organizations (Expenditure Responsibility)
Internal Revenue Code §4942 - Taxes on failure to distribute income
Treasury Reg. §53.4942(b)-1(b)(2)(ii)(A) and (B) - Operating foundations (PRI to an operating foundation may be a qualifying distribution only if the grantor foundation maintains some "significant involvement" in the active programs in support of which such grants are made)