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English arrow For Law Firms arrow Practice Areas arrow Difficult times for Nonprofit Endowments: Advising fiduciaries under the Uniform Prudent Management of Institutional Funds Act

Difficult times for Nonprofit Endowments: Advising fiduciaries under the Uniform Prudent Management of Institutional Funds Act


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Price: $50.00 -
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Course #: ENPA0068R


Description

How much of  its endowment can a nonprofit organization safely spend?

The confluence of the stock market collapse and the enactment of the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”) present unique challenges for nonprofit organizations with financial endowments.
 
A new statute,  the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”) has been in the works nationally for a few years, and it purports to  changes the rules for “perpetual” funds by giving boards the power to spend them below their historic dollar value or “HDV”.   UPMIFA had been enacted in 28 states at the end of 2008 and as of March 1, 2009 was  pending in 12 others.
 
As a result of the market meltdown many perpetual funds are worth less than their HDV.  Under UPMIFA it would seem that monies from these funds are still expendable.  Many governing boards, feeling the financial pinch, want to do just that – or are just doing it.  However, this notion has been resisted by state attorneys general, and has created a host of unanswered legal questions that make the fiduciary judgment calls even more difficult than they might otherwise be in these times.
 
This presentation is about these questions and will address the legal, policy, and political issues that nonprofit boards and their advisers will need to understand to develop practical solutions to the financial and spending needs of nonprofit organizations.  
 
Recorded: 9/2/2009 

 

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