Socially Responsible Investing (SRI) is an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.
Based on current trends, industry experts estimate that trillions of investment dollars will continue to move into the SRI space over the next decade. Nevada Community Foundation is uniquely positioned to join cutting edge and established national funders in this work.
Program-related investments, also known as PRIs, leverage limited foundation dollars—most often by providing low-interest loans—to promote mission-related foundation goals. These can be short or long-term loans, and recipients can both be nonprofit and for-profit entities.
While most PRI projects tend to be at least $100k or more, many PRIs are collaborative investments. There is thus no real minimum “entry point” for a single investor.
Pay for Success (PFS) is an innovative contracting model that drives government resources toward high-performing social programs. PFS contracts track the effectiveness of programs over time to ensure that funding is directed toward programs that succeed in measurably improving the lives of people most in need.
Governments typically fund social programs upfront or through contracts that pay by services delivered. This is a complete reversal of the model: governments only pay for programs that demonstrate desired results, empowering them to take bolder risks for effective programs.
In 2017, Nevada Senate Bill 400 permitted the Department of Health and Human Services to enter into “success contracts,” that is, a PFS. Nevada still lacks expertise in this area, however. Nevada Community Foundation has always pursued the vision of increasing both innovation and accountability; this funding model promises to strengthen both.
While there are multiple ways to structure a typical PFS contract, the most common involves four or more parties:
- The Investor pays for the program upfront and takes up the risk.
- The Government guarantees that it will repay the investor, with interest, if the program achieves the desired results.
- The Intermediary monitors and manages the process.
- The Service Provider, typically a nonprofit, administers the program.