franklin can save us again?
when government can’t fund projects …
Ben Franklin helped save the nation during the American Revolution. He might be able to do it again during the COVID-19 crisis, thanks to his favorite philanthropy tool, Program Related Investments (PRIs).
Despite passing in April nearly 230 years ago now, old Ben knew then what many very wealthy households know today. PRIs are potent funding tools, primarily when the government and the private sector cannot directly provide program support for critical projects that benefit large segments of American society.
If you are a wealthy philanthropist or a talented political activist, I have a recommendation below that I hope you will seriously consider.
A Deadly Challenge
Pandemic threats have long been on the federal government’s greatest fears list.
The U.S. Department of Health and Human Services (HHS) even invested heavily nearly a decade ago in four facilities that officials claimed could rapidly make vaccines and other lifesaving medicines if America were stricken by an infectious disease outbreak or a biological attack from one of our enemies.
HHS made a $670 million investment in 2012 and 2013 to build and expand the four manufacturing complexes, which were designed for three private companies and one major university to deliver emergency medicines and treatments, including flu vaccines, for both military and civilian use.
Notwithstanding the federal investment, however, vaccine production facilities in the United States are poorly equipped to research, develop, test, manufacture, and even distribute affordable lifesaving treatments to conquer pandemics like COVID-19 today or past maladies like the H1N1 virus a few short years ago.
As the United States and the rest of the world today confront the coronavirus pandemic, a pandemic that HHS is now saying could last 18 months or longer, none of the HHS-funded sites have developed or are close to delivering medicines to effectively counter the latest, rapidly escalating outbreak. So pervasive is this pandemic that American business is shutting down, plunging millions of Americans into unemployment and stressful uncertainty.
Complicating matters, China threatened during this crisis not to provide lifesaving medicines to the United States in retaliation for what it alleges was the U.S. role in fostering the pandemic in the first place. President Trump took the bait and now, disparagingly, calls COVID-19, the China Virus, when in fact, this pandemic is owned by every nation now suffering from its effects.
America desperately needs a research, testing, and manufacturing facility capable of rapidly responding to emerging and genetically engineered infectious disease outbreaks free of government contract restraints or corporate pricing pressures that have hampered past vaccine and treatment efforts.
PRIs to the Rescue?
The National Institute of Allergy and Infectious Diseases estimates that developing and delivering a vaccine currently takes 12 to 18 months. Without the production capacity to make tens of millions of doses, the availability period for these lifesaving measures is even longer.
An issue-specific PRI fund, immediately supported by America’s wealthiest donors, family offices, and community foundations, dedicated to this effort is a viable solution to today’s market and political challenges.
Resulting revenue from research, test kit production, patent royalties, and manufacturing fees—even provided to all patients worldwide at affordable costs—would offset the PRI costs over a six- to ten-year period, excluding supporting philanthropy from the principal and significant gifts that might return the principal to participating donors.
What is a PRI? PRIs are very low-cost charitable investments (usually at a 1% annual interest rate) that let qualified, tax-exempt non-profits and charitable public-private partnerships use the money to support their initiatives.
Put simply, a donor lends the money for a specific period, backed by supporting documentation like any commercial loan document. At the end of that loan period, the donor can get the donation back to give or reinvest it in that charity or another charity while also getting a valuable tax deduction. The donor can also choose to convert the loan into a gift.
If donors in the iconic Giving Pledge, for example, or even those who have chosen not to participate in the Giving Pledge, were to make a transformational gift to such a PRI fund, our vaccine-related production challenges could be overcome in short order, permitting the U.S. and global economies to recover more rapidly.
A more market-neutral operation for this process, not solely government or private sector funded, could produce better, faster, cheaper, and more broadly beneficial results for those threatened. PRIs were designed for this purpose, and activists are great at getting something to happen, too. Will you?
Ben Franklin would smile at that American innovation!