Are there any restrictions on the types of investments a nonprofit corporation can make?

Yes, there are restrictions on the types of investments a nonprofit corporation can make in California. According to state law, nonprofit organizations are not allowed to invest in risky investments, such as stocks and derivatives. Instead, they are only allowed to invest in low-risk, liquid investments, such as savings accounts, certificates of deposit (CDs), and Treasury bills. Nonprofits must also abide by certain regulations, such as the Uniform Prudent Management of Institutional Funds Act, which states that nonprofits must only invest in investments appropriate for their particular purpose and must take into consideration their expected total return as well as their ability to remain liquid. Moreover, state law prohibits nonprofit organizations from lending money to relatives or employees, borrowing money for investments, engaging in speculative investments, or investing more than 10 percent of their assets in any one investment.

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Are there any restrictions on the types of investments a nonprofit corporation can make?

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