Does program-related investing reduce charitable grants in private foundations? A case of decision making by hybrid organizations in the nonprofit setting

Qiu Chen, Shujun Ding and TieMei (Sarah) Li

International Studies of Management & Organization, 2025, vol. 55, issue 3, 307-326

Abstract: We examine how private foundations balance their conventional charitable granting and unconventional program-related investing (PRI), a unique in-house hybrid investment that can also fulfill foundations’ charitable missions. As grant-making agencies, private foundations traditionally distribute grants to program-operating charities to fulfill their charitable missions, but recently more private foundations embrace PRI. We analyze the competing institutional logics and the divergent stakeholder interests that are embodied in PRI. We find that private foundations follow the behavioral pattern of hybrid organizations and treat PRIs as an extension of their traditional charitable grants. More specifically, we find that PRIs do not substitute but supplement charitable grants. The findings also offer policy and practical implications.

Date: 2025
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DOI: 10.1080/00208825.2024.2435755

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