What are the legal restrictions on non-profit institutions spending endowment fund monies?
A. There is a uniform law that governs the management of endowment funds in almost every state. An endowment fund is defined as a form of institutional fund which is not wholly expendable on a current basis under the terms of the instrument creating the fund. The uniform laws govern the way that charitable institutions are allowed to spend and invest endowment funds. The original law which was created in 1972 is called the Uniform Management of Institutional Funds Act (UMIFA). It only allows the expenditure of amounts in excess of the historic dollar value of a fund which is the aggregate value of all gifts made by a donor into the fund. This does not include income and appreciation which may be spent. The uniform law was redrafted in 2006 to allow more flexibility in spending and investing charitable funds. The newer version which is called the Uniform Prudent Management of Institutional Funds Act (UPMIFA) does not automatically limit expenditures to amounts in excess of the historic
A. There is a uniform law that governs the management of endowment funds in almost every state. An endowment fund is defined as a form of institutional fund which is not wholly expendable on a current basis under the terms of the instrument creating the fund. The uniform laws govern the way that charitable institutions are allowed to spend and invest endowment funds. The original law which was created in 1972 is called the Uniform Management of Institutional Funds Act (UMIFA). It only allows the expenditure of amounts in excess of the historic dollar value of a fund which is the aggregate value of all gifts made by a donor into the fund. This does not include income and appreciation which may be spent. The uniform law was redrafted in 2006 to allow more flexibility in spending and investing charitable funds. The newer version which is called the Uniform Prudent Management of Institutional Funds Act (UPMIFA) does not automatically limit expenditures to amounts in excess of the historic
A. There is a uniform law that governs the management of endowment funds in almost every state. An endowment fund is defined as a form of institutional fund which is not wholly expendable on a current basis under the terms of the instrument creating the fund. The uniform laws govern the way that charitable institutions are allowed to spend and invest endowment funds. The original law which was created in 1972 is called the Uniform Management of Institutional Funds Act (UMIFA). It only allows the expenditure of amounts in excess of the historic dollar value of a fund which is the aggregate value of all gifts made by a donor into the fund. This does not include income and appreciation which may be spent. The uniform law was redrafted in 2006 to allow more flexibility in spending and investing charitable funds. The newer version which is called the Uniform Prudent Management of Institutional Funds Act (UPMIFA) does not automatically limit expenditures to amounts in excess of the historic
Related Questions
- If the Foundation successfully establishes an endowment fund to take care of the Park will the town cease to support the Park financially?
- Is there a discount for Non-profit organizations, government departments, or educational institutions?
- What are the legal restrictions on non-profit institutions spending endowment fund monies?
