5548 - Investment of trust funds.

     § 5548.  Investment of trust funds.        (a)  General rule.--Unless otherwise specifically directed in     the trust instrument, the board of directors or other body of a     nonprofit corporation incorporated for charitable purposes shall     have power to invest any assets vested in the corporation by     such instrument or the proceeds thereof separately or together     with other assets of the corporation, in the manner authorized     for fiduciaries by 20 Pa.C.S. Ch. 72 (relating to prudent     investor rule), and to retain any investments heretofore so     made. Any such nonprofit corporation may, by appropriate action     of its board of directors or other body, keep any investments or     fractional interests in any investments, held by it or made by     it, in the name of the corporation or in the name of a nominee     of the corporation.        (b)  Use and management.--Except as otherwise permitted under     20 Pa.C.S. Ch. 61 (relating to estates), the board of directors     or other body shall apply all assets thus received to the     purposes specified in the trust instrument. The directors or     other body shall keep accurate accounts of all trust funds,     separate and apart from the accounts of other assets of the     corporation.        (c)  Determination of income.--            (1)  Unless otherwise specifically directed in the trust        instrument, the board of directors or other body may elect to        be governed by this subsection with respect to assets thus        received, including any participation in any common trust        fund.            (2)  To make an election under this subsection, the board        of directors or other body shall adopt and follow an        investment policy seeking a total return for the assets held        by the corporation or in the name of a nominee of the        corporation or by an institutional trustee pursuant to        section 5549 (relating to transfer of trust or other assets        to institutional trustee), whether the return is to be        derived from capital appreciation, earnings or distributions        with respect to the capital or both. The policy constituting        the election shall be in writing, shall be maintained as part        of the permanent records of the corporation and shall recite        that it constitutes an election to be governed by this        subsection.            (3)  If an election is made to be governed by this        subsection, the term "income" shall mean a percentage of the        value of the assets so held by or for the corporation. The        board of directors or other body shall in a writing        maintained as part of the permanent records of the        corporation annually select a percentage and determine that        it is consistent with the long-term preservation of the real        value of the assets, but in no event shall the percentage be        less than 2% nor more than 7% per year.            (4)  The board of directors or other body may revoke an        election to be governed by this subsection if the revocation        is made as part of an alternative investment policy seeking        the long-term preservation of the real value of the assets        thus received. The revocation and alternative investment        policy shall be in writing and maintained as part of the        permanent records of the corporation.            (5)  For purposes of applying this subsection, the value        of the assets of the corporation shall be the fair market        value of the assets so held by or for the corporation,        determined at least annually and averaged over a period of        three or more preceding years. However, if the assets have        been held for less than three years, the average shall be        determined over the period during which the assets have been        held.        (d)  Scope of section.--This section shall apply to assets     hereafter received pursuant to section 5547 (relating to     authority to take and hold trust property), to assets heretofore     so received and held at the time when this article takes effect     and to reinvestments of all such assets.        (e)  Definition.--(Deleted by amendment).     (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 21,     1998, P.L.1067, No.141, eff. imd.; June 25, 1999, P.L.212,     No.28, eff. 6 months)        1999 Amendment.  Act 28 amended subsec. (a).        1998 Amendment.  Act 141 amended subsecs. (b) and (c) and     deleted subsec. (e). Section 4 of Act 141 provided that the     amendment of subsecs. (b), (c) and (e) shall apply to all     trusts, whether created before, on or after the effective date     of Act 141.        1988 Amendment.  Act 177 amended subsec. (d).        Cross References.  Section 5548 is referred to in sections     5549, 5585 of this title.