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:
- They have actual knowledge of enough facts so that, based only on those facts, the investment would be a jeopardizing investment,
- They are aware that an investment under these circumstances may violate the provisions of federal tax law governing jeopardizing investments, and
- 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.