IRS Proposed Regulations Add New Examples for Private Foundation Program-Related Investments

The Internal Revenue Service (IRS) has recently released proposed regulations that provide guidance to private foundations engaging in program-related investments (PRIs). The proposed regulations do not change the substantive rules and regulations or replace the existing examples, but add nine new examples that illustrate investments that qualify as PRIs. The new examples are based on prior guidance issued by the IRS.

This advisory provides an overview of program-related investments and the proposed regulations. It also provides additional information about how foundations and other grantmakers may use mission related investments—including investments in social enterprises, such as L3Cs, benefit corporations, flexible purpose corporations, and B Corporations—to move beyond grantmaking.