Nonprofit Borrowing

December 29, 2017

In response to examples in the news and client inquiries, we have prepared this paper to address the topic of nonprofit borrowing. For sake of clarity, we will start by identifying the two most common approaches: borrowing from an endowment and borrowing against an endowment. As a preface, it is important to note that many endowments, especially those with restricted funds, will not easily be able to engage in either method; furthermore, the charter, investment policy statement, or other policies may also prevent borrowing in any form. We are not able to give legal advice as to the feasibility of borrowing, and suggest an organization consult with its legal services provider before taking any action.

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