UPMIFA Resources
NACUBO is pleased to be working with the Association of Governing Boards (AGB) , 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:
- assets would be invested prudently in diversified investments that sought growth as well as income, and
- 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)
