Foundation Finance and Investment Management

A Chapter in Mastering Foundation Law:
The Council on Foundations Compendium of Legal Resources

Foundation Finance and Investment Management CoverThis chapter examines Uniform Prudent Management of Institutional Funds Act (UPMIFA) and other laws that govern the management and investment of endowments and other foundation financial assets. It also includes a discussion of the board’s role and the use of outside advisors.

This chapter is divided into four different parts:

State Regulation of Investment Activity–UPMIFA and UPI

Part One looks at state regulation of investment management, namely UPMIFA and UPIA. It does this by looking at the history and requirements of UPMIFA as well as the "prudent investor standard."

Federal Regulation of Investment Activity

Part Two discusses federal regulation of investment activity by looking at IRC §4943 (excess business holdings), §4944 (jeopardy investments), and §§511-514 (UBIT).

Impact Investing

Part Three addresses impact investing. It covers program-related investments (PRIs), mission-related investments (MRIs), and socially responsible investments (SRIs).

Best Practices

Part Four looks at best practices including; understanding fiduciary responsibilities, the investment policy statement, the investment committee, outside investment management service providers, ongoing compliance, regular reports, and conflicts of interest.