Create Funding Partnerships

A New Funding Source for Public Projects 

With community engagement and local awareness, public-private-philanthropic partnerships (P4s) can more easily tackle the strengths each sector requires to address complex social challenges more effectively and efficiently than any one sector could achieve alone. In my opinion, P4s are a viable option for funding future public projects and should be used expeditiously.

The government alone can no longer fund all the big publicly beneficial projects that America needs to rebuild our infrastructure, preserve our climate, house people more affordably, provide better healthcare options, etc. 

Partnerships involving the public sector, the private sector, and philanthropies can solve some of the critical funding challenges if someone champions those projects. I am just such a champion, ready to take up the cause.

Working alongside community foundations, other not-for-profits, for-profits, non-governmental organizations, think tanks, and P4s has many benefits:

• Goal alignment related to diverse resources and broad perspectives.

• Enabling conditions and incentives, mainly through public partners.

• Diversified capabilities and project strength.

• Access to multi-stakeholder collaborations.

• Exposure to multi-talented and experienced experts.

• Gateways to innovative technologies.

• Transactional financing.

• Scalable economies for both revenue and expenses.

• Measurable impact.

• Proper balance between financial viability and profit motivation.

• More flexibility centered around risk-taking and market experimentation.

Two philanthropic funding tools are particularly important to making P4s work at an optimum level, in my opinion:

• Program-Related Investments (PRIs): A program-related investment (PRI) is a mission or low-interest social investment many foundations make to achieve their philanthropic goals. PRIs can make inexpensive capital available to organizations addressing social or environmental concerns. Still, they permit the nonprofit to return the borrowed funds to the investor later with a modest interest payment (generally one or two percent at most) for using the loan during a determined period.  PRIs have been around since the days of Benjamin Franklin and have the added benefit of being memorialized in federal statute so that it is apparent what is and what is not the proper use of a PRI. For example, the primary purpose of a PRI must be to accomplish one or more charitable non-profit exempt purposes; production of income or appreciation of property is not a significant purpose of the project, and influencing legislation or taking part in political campaigns on behalf of candidates is not a purpose.

• Social Impact Funds: Social impact funds, far less regulated than PRIs but very popular across asset classes, provide critical capital to companies and organizations that intend to generate a measurable social benefit for a project. They also generate modest financial returns for those investing below or above market rates, depending on the project and its social value.