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Non-profits - UMIFA to UPMIFA – Are you ready?
Nonprofit Organizations
If you are a member of a non-profit board, you may be aware of the Uniform Management of Institutional Funds Act (UMIFA) which provided guidelines regarding the management and spending of endowments funds, and the restrictions on those funds since 1972. In July 2006, the National Conference of Commissioners on Uniform State Laws (NCCUSL) approved the Uniform Prudent Management of Institutional Funds Act (UPMIFA) which is designed to replace UMIFA. Many states, including Maryland, Virginia, West Virginia and the District of Columbia have since enacted UPMIFA. Like UMIFA, the two basic principles held by the UPMIFA are, that assets are to be invested prudently in diversified instruments that seek growth as well as income, and that appreciation of assets can prudently be spent for the purposes of any endowment fund held by a charitable institution. The UPMIFA act also brings with it certain environmentally necessitated upgrades.
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