Section 2:  PRI Deals



Annual PRI Activity Summary

From 1998 to 2016, Minnesota private foundations collectively invested a total of $164,460,856 in 554 PRIs. This equates to an average of about $8.7 million invested in 29 PRIs per fiscal year. The two charts below show (1) the total number of PRIs made by Minnesota private foundations each fiscal year, and (2) the total dollars deployed in PRIs by Minnesota private foundations each fiscal year. Please note that 2016 data is incomplete. All dollar values on this page are adjusted for inflation.

 

Total Number off PRI's Made by MN Private Foundations
Per Fiscal Year

 


Total PRI Dollars Invested by MN Private Foundations
Per Fiscal Year

 

Key Takeaways:

  • There was a sharp albeit temporary decline in the use of PRIs between fiscal years 2007 and 2008, likely due to the economic recession.
  • There appears to be more year-over-year variability in the dollars deployed through PRIs compared to the number of PRIs made.
  • Year-to-year variability aside, overall use of PRIs appears fairly flat over the research period, perhaps with a slightly increasing trend.
 
 
 


2014 PRI Activity in Landscape Context

Each year, private foundations are required by the IRS to distribute at least 5% of their non-charitable assets for charitable purposes. Private foundations can count five types of disbursements toward meeting this requirement: (1) charitable grant contributions; (2) charitable administrative expenses; (3) PRI distributions; (4) amounts paid to acquire assets used directly in carrying out charitable purposes; and (5) amounts set aside for specific future charitable projects. The charts below show PRI activity alongside the other four types of charitable distribution activities reported by Minnesota private foundations in fiscal year 2014, which collectively equaled about $1.3 billion (unadjusted). All dollars on this page are unadjusted for inflation, and chart dollar values are rounded to the thousands.

 

Breakdown of Qualified Charitable Distribution (QCD)
for All MN Private Foundations Combined
in Fiscal Year 2014

 

Breakdown of Combined Qualified Charitable Distributions
in Fiscal Year 2014 By Percentage

 

Key Takeaways:

  • Only $3 of every $1,000 in qualified charitable distributions made by Minnesota private foundations in fiscal year 2014 went to PRIs.
  • PRIs account for only a tiny fraction of the overall charitable distribution activities of Minnesota's private foundations.
  • By far, Minnesota private foundations made most of their charitable distributions in the form of grant contributions.
 
 
 


PRI Activity by Deal Size

The two charts below show (1) the distribution of PRIs by deal size and (2) the distribution of PRI dollars by deal size. The x-axis categories should be read from left to right as “Deal sizes less than or equal to $100,000,” then “Deal sizes of $100,001 to $200,000,” then “Deal sizes $200,001 to $300,000,” and so forth. Please note that the scale of the x-axis categories changes at $1 million and that all dollars in these charts and calculations are adjusted for inflation.

 

Percentage of PRI's by Deal Size

 

Percentage of PRI Dollars by Deal Size

 

Key Takeaways:

  • Over half of all PRIs made were for amounts less than or equal to $100,000.
  • Roughly 94% of all PRIs were made for amounts less than or equal to $1 million, together accounting for 60% of PRI dollars deployed.
  • About 6% of all PRIss made were for amounts greater than $1 million, together accounting for 40% of the PRI dollars deployed.
 
 
 


PRI Deal Size by Foundation Size

The chart below shows how the average and median PRI deal size changes as the size of the originating private foundation grows. In this chart, foundation size is defined as the foundation’s total assets at the beginning of the fiscal year in which the PRI was made as defined in Part II, Line 16, Column (a) of the Form 990-PF. All dollars are adjusted for inflation. Average and median values are also rounded to thousands.

 

Average and Median PRI Deal Size

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Key Takeaways:

  • The average and median PRI deal size both generally increase with foundation size.
  • For more information on how the total number of PRIs and dollars deployed through PRIs change as foundation size grows, see PRI Activity by Foundation Size.
 
 
 


PRI Activity by Issue Area

The two charts below show (1) the percentage of PRIs made by issue area, and 2) the percentage of PRI dollars deployed by issue area. PRIs were initially categorized into issue area using the taxonomy promulgated by Foundation Center, and then adjusted into final categories to best most clearly present our findings. Categories with under 5% of PRIs were made into sub-categories and combined under “Other.” For calculation purposes, all dollars were adjusted for inflation.

Percentage of PRI's
by Issue Area

Percentage of PRI Dollars
By Issue Area

Key Takeaways:

  • Both PRIs and PRI dollars were used most often to support economic development, human services, and education.
  • If we had been able to disaggregate PRIs made as educational loans to individuals, as described in Methodology Notes, the first chart would have shown a huge share of PRIs going to education, but the second chart would have remained unchanged.
 
 
 


PRI Activity by Asset Type

PRIs are a flexible tool. As long as no significant purpose of the investment is the production of income or appreciation of property, PRIs can assume any financial structure and terms. The two charts below show (1) the percentage of PRIs by asset type, and (2) the percentage of PRI dollars by asset type. Please note that while “asset type” is not a defined field in Form 990-PF, most foundations provide reliable insight into the asset type of each PRI in the Part IX-B description. Nonetheless, some uncertainty remains and is reflected below. All dollars are adjusted for inflation.

Percentage of PRIs
by Asset Type

Percentage of PRI Dollars
by Asset Type

Key Takeaways:

  • Debt is by far the most common asset type for PRIs both in terms of number of PRIs and PRI dollars deployed.
  • Equity is the least common asset type for PRIs both in terms of number of PRIs and PRI dollars deployed.
  • Real estate appears more common than equity. However, we learned that it can be unclear whether a particular real estate purchase should be considered a PRI or direct-use charitable asset. It is possible that some PRIs in our dataset should have been reported as direct-use charitable assets and not PRIs.