PROGRAM RELATED INVESTMENTS (PRI)
Download the complete Information & Application Packet (PDF, 4 pages)
PURPOSE OF THE PROGRAM
Program Related Investments (PRI) enhance and advance the philanthropic work of Rotary Charities and Rotary Camps & Services. PRIs are primarily an extension of Rotary Charities' grant making program and are not viewed as an alternative investment strategy.
APPLICATION
Applicants must meet the following eligibility requirements:
- Non-profit Corporations, Unit of Government, School or Library
- Located in Antrim, Benzie, Grand Traverse, Kalkaska or Leelanau Counties
- Applicants to the PRI Program must also meet the standards of the Rotary Charities grant guidelines and have the organizational capacity to successfully repay the loan or guarantee
PROCESS
Eligible organizations may apply directly for PRI vehicles. Applicants will first be encouraged to submit an application for a loan guarantee to a participating local bank. If the loan guarantee is denied or not practical for the organization, an application for a direct loan may be submitted.
REVIEW AND INVESTIGATION
All applicants will complete a PRI application form. The application will be initially reviewed by the staff. If the application meets the basic qualifications it will be submitted to the PRI Committee of Rotary Camps & Services, which will meet with the applicant, review the request and recommend terms and conditions. The recommendations will be submitted to the Rotary Charities Board for final approval. Following final approval the staff will be authorized to execute the documents.
REPORTING REQUIREMENTS
All successful applicants will be required to forward copies of loan statements on a regular basis, either monthly or quarterly, to Rotary Charities. All PRI recipients will be required to notify Rotary Charities and Rotary Camps & Services of any changes in status that might affect the ability to repay debt.
OTHER REQUIREMENTS
Funds will used only for the purposes specified in the application and not to influence legislation or an election or for any other purpose which does not meet the Internal Revenue Service code provisions for charitable, educational and scientific purposes.
None of the funds are to be transferred to any other organization without the advance written permission of Rotary Charities. Any news releases, public announcements, or other informational material l pertaining to this PRI should acknowledge Rotary Charities and Rotary Camps & Services.
PROGRAM RELATED INVESTMENT TOOLS
LOAN GUARANTEES
Definition: Rotary Charities pledges our full faith and credit as security for the benefit of a charitable project. This may take the form of a loan guarantee.
Terms: The guarantee will require the lending institution or co-guarantors to assume some of the risk. Generally, no more than 30% of the total amount available for guarantees should go to one organization. It would be the desire of RC Board that the portfolio would be used to guarantee payment, so in the case of default, the bank would collect first from the assets of the organization and then come to RC. If this is not possible, the arrangements will be described in the Letter of Understanding with the non-profit organization. Terms may vary with each applicant and lending institution, but standard forms approved by the Committee will be used. Generally, the length of an agreement will not exceed three years. Rotary Charities will not levy a fee for this service to non-profits.
Funding Level: The amount available for Loan Guarantees will not exceed 5% of the total Rotary Charities portfolio on the last day of the prior fiscal year (6/30).
DIRECT LOANS
Definition: A flexible loan program for eligible organizations. A loan is taken directly from the assets of Rotary Charities, with the expectation that it will be repaid.
Criteria: An applicant would be considered for a direct loan when there is an ability to repay the funds, but would not be considered commercially “bankable” ie: length of the loan, risk involved, etc.
Terms: A loan can be secured or unsecured. It can require repayments periodically or in a lump sum on maturity according to the circumstances surrounding the project and the degree of risk involved. The length of the loan can vary, but generally will not exceed three years. Maximum loan size will be $100,000. A promissory note and agreement will be signed. The interest rate will be equal to the 90 day Treasury bill on the date of closing or 3%, whichever is greater.
Funding Level: The amount available for Direct Loans will not exceed more than 1.25% of the total market value of Rotary Charities portfolio on the alst day of the prior fiscal year (6/30).
The amount available for Direct Loans will not exceed more than 1.25% of the total market value of Rotary Charities portfolio on the alst day of the prior fiscal year (6/30).
RECOVERABLE GRANTS
Definition: This vehicle would be used to make small loans and should be considered grants until repaid.
Criteria: An applicant would be considered for a recoverable grant when there is an indication of an ability to repay the funds, but would not be considered commercially “bankable” or would exceed the normal terms and conditions of a Rotary Charities direct loan (inability to pay interest, extended length of loan, no co-signers, etc.)
Terms: Generally, these grants would be under $25,000 . They would almost always be zero-interest and unsecured.
Funding Level: No special provisions are made, recoverable grants are to be allocated from the current grant cycle.
FOR MORE INFORMATION
Please contact Marsha Smith, Executive Director
231-941-4010
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