Navigating the Complexities of Alternative Investments for Your Nonprofit

ARTICLE | July 11, 2024

Authored by Vasquez + Company

Alternative investments, such as hedge funds, private equity, real estate, venture capital, and cryptocurrency, often offer higher long-term performance but come with significant risks and potential tax liabilities. These investments lack easily ascertainable market values, are often illiquid, and can impose substantial fees. Nonprofits considering these options must weigh the benefits of high returns against the complexities of management fees and unrelated business income (UBI) tax implications. Consultation with a professional is essential to navigate these challenges and determine if such investments align with your organization's financial strategy.

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