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

Yes, there are restrictions on the types of investments a nonprofit can make in North Carolina. Generally, nonprofits must invest exclusively in investments that are safe and secure, and that can help to further their charitable mission. Nonprofits should make sure that their investments are in accordance with the North Carolina Nonprofit Corporation Act. The Act states that a nonprofit shall not invest more than 5% of its total assets in any single investment or security. In addition, a nonprofit should strive to diversify its investments and should not engage in investments which are speculative or involve more than a minimal risk of loss. Furthermore, the Act prohibits the use of any investment that is not consistent with the nonprofit’s charitable mission. If a nonprofit would like to invest in more risky investments, such as stocks or bonds, it must first obtain approval from the North Carolina Department of the Secretary of State. The nonprofit must submit a Request for Approval of Additional Investments form to the Department to obtain approval. In addition, all investments must be reported to the Department on an annual basis. A nonprofit should review its investments regularly in order to maintain compliance with North Carolina law. Overall, when making investments, nonprofits must ensure that they are following the law and investing in appropriate investments. Doing so can protect the nonprofit from losses and help ensure that it furthers its charitable mission.

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

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