Emmaline Jurgena and Jason Kohout (Foley & Lardner LLP): Mission-Related Investments under Trust Law (October 12, 2020)

Emmaline Jurgena and Jason Kohout, of Foley & Lardner LLP, have made available for download their article, “Mission-Related Investments under Trust Law,” published in JDSUPRA. The abstract is as follows:

As explored in a previous article, the IRS clarified that mission-related investments (MRIs) will not trigger the private foundation “jeopardy investment” rule (that is, a private foundation cannot make investments that would imperil its ability to conduct charitable activities). Although the definition of “mission-related investments” is somewhat vague, it refers to an investment approach where the primary goal of the investments is to generate income, but where investment choices are influenced by charitable or societal impact (in contrast, a program-related investment’s primary purpose is to advance a charitable purpose as opposed to the production of income). Depending on the exact circumstances, an example of a mission-related investment might be an investment in a small biotechnology start-up that is developing new scientific methods to address a widespread condition or disease. This may be highly risky, but the foundation wants to invest, not only for possible financial gain, but also to support scientific development. In Notice 2015-62, the IRS stated that private foundations may make mission-related investments without triggering the jeopardy investment rule as long as foundations exercise prudence and ordinary business care.

Click here to view Emmaline Jurgena and Jason Kohout’s summary of “Mission-Related Investments under Trust Law.”

Posted by Elise Kim, Managing Associate Editor, Wealth Strategies Journal.

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