The board of directors of a nonprofit has a fiduciary responsibility to protect the assets of the nonprofit and ensure that the nonprofit's operations and activities use the assets to further the nonprofit’s mission. A prudent way to serve as fiduciaries of a nonprofit's assets may be to invest the nonprofit’s cash in investment vehicles, such as stocks and bonds, and other financial investments.

While not specifically mandated in the federal or state regulations that govern nonprofit organizations, a carefully crafted and well-maintained investment policy statement is one of the best ways to document a prudent investment process.

Sample investment policies for nonprofit organizations.