Civic Engine Fund Back to presentation
Section 1

Legal Review Package

Dear Counsel:

Your client is considering directing a Program-Related Investment (PRI) from their donor-advised fund into the Civic Engine Guaranty Fund LLC, a Delaware limited liability company. This package contains the key documents for your review.

The Fund pools investor capital in U.S. Treasury securities and uses that capital base to provide completion guarantees for qualifying sustainable housing developments in the Kansas City metropolitan area. Investor capital is never deployed directly into projects — it remains in Treasuries earning ~4.35% net annually.

Your client's DAF sponsor will need confirmation that this investment qualifies as a PRI under IRC Section 4944(c). We have prepared a PRI Qualification Opinion Template (Document 1.9) that addresses each of the four statutory tests.

Key questions for your review:

  1. 1. Does the Fund's structure satisfy all four PRI tests under IRC 4944(c)?
  2. 2. Does the ~4.35% return create any "significant purpose" issues for PRI qualification?
  3. 3. Are there self-dealing concerns under IRC 4941 or 4958 given the Manager/developer relationship?
  4. 4. Does your client's DAF sponsor impose additional requirements beyond the IRC tests?

We are available for a call at your convenience to discuss any questions.

Sincerely,
Jonathan Arnold
Managing Member, Civic Engine Fund Management LLC
jarnold@arnolddevelopmentgroup.com
(816) 529-7010
Section 2

Document Package

PRI Qualification Opinion Template
Document 1.9
Analysis of all four IRC 4944(c) tests with Fund-specific application
Download
Operating Agreement Key Provisions
Document 1.3
Governance, voting rights, manager authority, removal provisions, key person
Download
Fund Overview (Term Sheet)
Document 1.10
Complete offering terms, fees, structure, entity chain, risk factors summary
Download
Entity Structure Memo
Document 3.1
Full entity diagram, conflicts disclosure, Arnold Holdings relationship
Download
Section 3

Key Structural Facts

Fund Entity Civic Engine Guaranty Fund LLC (Delaware)
Manager Civic Engine Fund Management LLC (Delaware)
Manager Owner Arnold Holdings LLC (Delaware, to be formed prior to Fund closing), 100% owned by Jonathan Arnold
Tax Status Partnership (pass-through)
Offering Exemption Rule 506(c), Regulation D
Investor Eligibility Accredited investors (Rule 501(a))
Collateral 100% U.S. Treasury securities
Net Return ~4.35% annualized (retained, compounding; based on current Treasury rates)
UBTI None — Treasury interest excluded under IRC 512(b)(1)
Fund Term 15 years + two 2-year extensions
Conflicts Manager is wholly owned by Arnold Holdings LLC. Jonathan Arnold, who controls Arnold Holdings LLC, also controls Arnold Development Group, the developer of projects receiving Fund guarantees.
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