Three business veterans with a philanthropic bent have created a new foundation to breathe life into a little-used alternative-investment tool, Program Related Investments, or PRIs.

And they are working with other foundation executives to further so-called “impact investing.”

On Wednesday, the Venn Foundation will release a report on how PRIs, “underused” since 1998, can become a source of patient, low-cost growth capital for nonprofit enterprises, or even small businesses or community-government collaborations that have a social impact.

“PRIs and other impact-investing tools are the future of philanthropy,” Trista Harris, president of the Minnesota Council on Foundations, said in a prepared statement. “The ‘PRI Pulse’ is a powerful resource for foundations exploring how to invest capital where it’s needed most.”

Venn was formed by board members Rob Scarlett and Jeanne Voigt, and Venn CEO Jeff Ochs, a veteran executive who has led the Minnesota angel-investor network as well as the University of Minnesota’s Discovery Capital Program.

“Our vision is to create a new category of flexible, below-market-rate capital that can be directed creatively to projects and organizations across all sectors that advance charitable goals,” Ochs said. “By opening a special donor-advised fund called a Venn Account, any individual or organization can recommend that their charitable dollars be used by Venn to make PRIs.

“Venn can syndicate any one PRI among any number of Venn Accounts. Financial returns from these PRIs go back to participating accounts pro rata for the donors to redeploy into new PRIs, or grants, as desired.”

PRIs are a special type of investment that private foundations make for the primary purpose of advancing charitable missions.

U.S. tax law requires that foundations pay out at least 5 percent of total assets each year for charitable or educational purposes. PRIs count toward that distribution requirement. Unlike grants, private foundations can recycle the dollars returned from successful PRIs for new investments.

“PRIs have a lot to offer nonprofits looking for below-market [cost] capital,” said Scarlett, the Venn board chairman and a veteran industrial and international-business manager. “PRIs are poised to usher in a new era of creative, cross-sector partnerships.”

In Minnesota, over the 19-year research period, only 39 of 1,600-plus private foundations made at least one PRI. St. Paul’s Otto Bremer Trust invested the most money in PRIs over the period, $47 million.

The report offers several case studies of PRIs. They include a $245,000 PRI loan made by the Labrador Foundation to a White Bear Lake charter school, Level Up Academy; as well as the Jeanne M. Voigt Foundation’s $60,000 low-interest PRI loan in 2016 to Minnepura Technologies, a fledgling business commercializing a pool filter that, potentially, could save billions of gallons of fresh water annually.

Binary Bridge, a Twin Cities female-led concern that creates hi-tech solutions for humanitarian medical teams and rural clinics in developing countries, is the first recipient of a Venn-syndicated PRI investment.