What legal requirements regulate endowments in North Carolina?
In 1985, North Carolina adopted the Uniform Management of Institutional Funds Act (UMIFA). (See Chapter 36B of the NC General Statutes.) This act prohibits invasion of the endowment corpus. Total return on the endowment investment (i.e. capital appreciation as well as income) can be spent. The amount available to award for spending is limited to the accumulated net earnings in the endowment fund. If no net earnings exist, regardless of the size of the endowment, no awards for spending can be made.
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