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NACUBO is pleased to be working with the Association of Governing Boards, and Commonfund to inform higher education institutions about this new model law.

What is UPMIFA?

The Uniform Prudent Management of Institutional Funds Act (UPMIFA) is a uniform state law that provides fundamental rules for the investment of funds held by charitable institutions and the expenditure of funds donated as “endowments.” Those rules support two general principles:

  1. assets would be invested prudently in diversified investments that sought growth as well as income, and
  2. appreciation of assets could prudently be spent for the purposes of any endowment fund held by a charitable institution.

How Colleges Benefit from UPMIFA

  • UPMIFA abolishes the historic dollar value limitation on expenditures that was in UMIFA
  • States may adopt an optional rule that presumes expenditure exceeding 7% of fair market value of a fund is imprudent (not addressed in UMIFA)
  • Establishes a new procedure for releasing restrictions on small institutional funds (less than $25,000) held for a long period of time (20 years), requiring only notice to the Attorney General 60 days in advance of the release (not addressed in UMIFA)

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