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

In the state of Washington, nonprofit organizations are subject to the same laws and regulations that govern for-profit corporations. As such, there are certain restrictions on the types of investments a nonprofit corporation can make. Under Washington law, nonprofit organizations may only invest in “safe investments,” which are defined as assets that are expected to maintain their value over the long term and yields a reasonable rate of return. This can include government bonds, certificates of deposit, and mutual and other investment funds. Generally, investing in stocks and business ventures are not considered safe investments and should be avoided by nonprofit organizations. In addition, nonprofit organizations should avoid investing in any assets that will not generate enough return or income to support the organization’s mission. This includes investments that are considered “at risk” or have the potential to decrease in value over time. It is important that nonprofits understand their investment restrictions and the risks associated with any investments they make. Organizations should have a well-developed investment policy that outlines the organization’s goals, budget, risk tolerance, and types of investments they will make. This policy should be reviewed annually to ensure that the organization remains compliant with the law and meets its investment goals.

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

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