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Knowing - Jeopardizing Investments

Foundation managers will be considered to have participated in making an investment knowing that it is jeopardizing the carrying out of any of the foundation's exempt purposes only if:

  1. They have actual knowledge of enough facts so that, based only on those facts, the investment would be a jeopardizing investment,
  2. They are aware that an investment under these circumstances may violate the provisions of federal tax law governing jeopardizing investments, and
  3. They negligently fail to make reasonable attempts to learn whether the investment is a jeopardizing investment, or in fact are aware that it is such an investment.

The term knowing does not mean having reason to know.  However, evidence tending to show that a foundation manager has reason to know of a particular fact or particular rule is relevant in determining whether actual knowledge of such fact or rule is present.


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Page Last Reviewed or Updated: 30-Apr-2013