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March 11, 2024 23 mins

Welcome to EO Radio Show - Your Nonprofit Legal Resource. Episode 73 discusses frequently used terms in the nonprofit world pertaining to investment activities. Public charity and private foundation directors and officers need to understand their obligations as fiduciaries when determining whether an investment opportunity meets the criteria for a prudent investment, a program-related investment, or a mission-related investment. This episode unpacks the rules around each term, covering a basic explanation of “prudent investment,” “PRI,” and “MRI.” The episode concludes with recommendations for ensuring that a private foundation’s investments qualify as PRIs and best practices for developing an investment policy statement that covers the overall portfolio investment policy statement.

Resources:

Farella YouTube channel: www.youtube.com/@farellabraunmartel/podcasts

EO Radio Show #16: Basics of Impact Investing: A Conversation About Investment Policies and Evaluation Metrics For ESG Investors

EO Radio Show #35: Hot Topic: UPMIFA in the Context of Financial System Instability

IRS Issue Podcasts for charities: www.stayexempt.irs.gov/home/resource-library/issue-podcasts

Instructions for 990PF: www.irs.gov/pub/irs-pdf/i990pf.pdf

IRS pages on Expenditure Responsibility and Program Related Investments: 

www.irs.gov/charities-non-profits/private-foundations/terms-of-grants-private-foundation-expenditure-responsibility

www.irs.gov/charities-non-profits/private-foundations/terms-of-program-related-investments-private-foundation-expenditure-responsibility

www.irs.gov/charities-non-profits/private-foundations/violations-of-expenditure-responsibility-requirements-private-foundations

UPMIFA Documents: www.uniformlaws.org/committees/community-home?CommunityKey=043b9067-bc2c-46b7-8436-07c9054064a3

If you have suggestions for topics you would like us to discuss, please email us at eoradioshow@fbm.com

Additional episodes can be found at EORadioShowByFarella.com

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

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