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

Yes, a nonprofit corporation in New York is subject to restrictions on the types of investments it can make. Under New York law, a nonprofit corporation is prohibited from investing in any type of security that is not legal or permissible under the New York Nonprofit Corporation Law. This includes investments in stocks, bonds, mutual funds, and other investments that are not related to the nonprofit’s purpose or mission. In addition, New York law prohibits nonprofit corporations from investing in speculative investments, such as futures, options, derivatives, and other similar investments. Nonprofit corporations are also prohibited from loaning money to directors, officers, or employees of the corporation, or using funds to purchase real property. The New York Nonprofit Corporation Law also requires that all investments made by a nonprofit corporation must be made in “good faith” and for a “reasonably fair return.” This means that the investments must be made with the intention of generating profits, not just for the benefit of the corporation’s directors or officers. Finally, all investments made by a nonprofit corporation must be reviewed and approved by the board of directors, and all investments must be reported to the Attorney General of New York. These requirements help to ensure that the corporation’s investments are made in the best interests of the corporation and of its nonprofit mission.

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

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