Talk with your professional investment advisers.  Under the Uniform Prudent Management of Institutional Funds Act, directors/trustees have a fiduciary duty to manage investments in good faith and with the care an ordinary person in a like position would exercise under similar circumstances. (See Ready Reference Page: “New UPMIFA Sets Rules For Management of Charitable Funds”) (UPMIFA has been adopted in some form in every state except Pennsylvania, but Pennsylvania nevertheless imposes a similar fiduciary duty on trustees and directors dealing with investments.)

There is no single correct answer about what to do in these volatile times.  The key is that the directors pay attention, consider the factors set forth in UPMIFA, and decide what they want to do, if anything.  It may be appropriate to re-balance investments in different asset classes, to change investments internally to reposition the portfolio, or to decide which specific investments to sell to provide operating funds.  It may be appropriate just to hold tight.  Unless your board members are all professional investment managers (which would be a really bad idea from a diversity perspective), this is the time to get professional advice and document what they decide and, to the extent possible, why. 

As a matter of protecting against personal liability, it is evidence of good faith exercise of ordinary care. Even if the board has delegated full discretion to a professional manager, this is the time to be sure that the manager is operating within the investment policies, and perhaps whether those policies should be modified.  A court will not judge whether decisions were ultimately good ones, but whether they were considered and made in good faith.  Failure to consider the issues in these times could be viewed as a failure to act in good faith.

On a more optimistic level, the review might make a big difference in the ultimate results of the investments and enhance the ability of the organization to carry out its program.