Can a foundation's investment portfolio be managed at a firm where a baord member or director is employed? What is that board member/director is a daughter of person who set up the 501c3?

There is a potential for conflict of interest, so hopefully the full board is aware of the situation and has approved it. At the very least the board member should recuse himself from any votes having to do with hiring or paying the investment firm. He should also make it clear to the board that he does not receive any compensation from his company for them having won the foundation's business. And I would recommend that the board review its policy regarding possible conflicts of interest of board members, and make sure that it is explicit about this kind of issue. The fact that the board member is a relative of a founder is immaterial.

Thank you for your response. I have been researching self dealing law regarding private foundations and have seen that there is a self-dealing exception for resonable compensation to a disqualified person providing a professional service.

Such as an accountant (who sits on the board or is a family member)providing advice and services and reaceiving reasonable fees for that service. I think investment management services would be similar situation as long as fees charged are low

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