UPMIFA requires a legal determination of what amount should be spent from an endowment each year, based on a determination of what is prudent after consideration of factors listed in the Act. Has the absence of a fixed "floor" for spending led to overspending? The accounting rules require that some amount be listed as "permanently restricted assets," and some accountants have been helping organizations make this legal determination. What happens when the accounting decisions affect spending?
Since its adoption by the Uniform Law Commission in 2006, UPMIFA has been enacted into law in 49 states, the District of Columbia, and the U.S. Virgin Islands. UPMIFA's achievements include the elimination of the historic dollar value constraint thereby allowing institutions greater flexibility in establishing investment strategies, the nonjudicial modification or release of trust restrictions, and a more defined prudence standard.
During the ensuing nine years, however, many state charity officials have encountered challenges in the oversight and regulation of institutional funds under the provisions of UPMIFA. These issues include the failure of institutions to maintain copies of gift instruments and the adoption of imprudent spending policies. How can Attorneys General protect and enforce donor intent while, at the same time, insuring institutions have the flexibility to exercise their discretion under UPMIFA?
Join us on July 8 for a discussion of these and other current issues with UPMIFA.