Susan Gary's clear explanation of UPMIFA's provisions and how it developed from UMIFA. Gary served as the reporter for the Uniform Law Commission's UPMIFA drafting committee.
it is the successor to 1972's UMIFA, which created the first broad legal guidance on investing by nonprofits.
As a corollary to its redefinition of income, UMIFA made explicit
endowments (80) then UMIFA would restrict universities from spending
UPMIFA supersedes UMIFA
and provides for enhanced guidance over endowments.
While many institutions have interpreted UMIFA
as allowing them to pay direct and administrative fees on endowments, even if they are under water, Van Gorden advises endowment managers to research the issue thoroughly and seek informed Legal advice.
UMIFA was enacted to provide a more flexible investment environment for endowments and foundations compared to private trusts.
Soon after the establishment of UMIFA, the government also set standards for the investments of private pension funds.
UMIFA provides some alternatives for giving the donor and the organization influence in defining the future uses of an endowment.
UMIFA allows that with the exception of states that restrict expenditure of net appreciation, all growth in the fair value of the assets over the historic dollar value of a fund is available for use.
Exhibit 1: Jurisdictions in Which UMIFA Has Been Adopted State Year adopted Arkansas 1992 California 1973 Colorado 1973 Connecticut 1973 Delaware 1974 District of Columbia 1977 Florida 1990 Georgia 1984 Illinois 1973 Indiana 1989 Iowa 1990 Kansas 1973 Kentucky 1976 Louisiana 1976 Maine 1993 Maryland 1973 Massachusetts 1976 Michigan 1976 Minnesota 1973 Missouri 1976 Montana 1973 New Hampshire 1973 New Jersey 1975 New York 1978 North Carolina 1985 North Dakota 1975 Ohio 1975 Oklahoma 1992 Oregon 1975 Rhode Island 1972 South Carolina 1990 Tennessee 1973 Texas 1989 Vermont 1973 Virginia 1973 Washington 1973 West Virginia 1979 Wisconsin 1976 Wyoming 1991
UMIFA provides legal solutions to five endowment issues: