E. Uniform Management of Institutional Funds Act
   January 1989

Development Policy and Administration Manual 
Chapter VI. Endowment Funds
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               UNIFORM MANAGEMENT OF INSTITUTIONAL FUNDS ACT


Before 1991, The Uniformed Management of Institutional Funds Act
(UMIFA) applied to private incorporated or unincorporated
organizations organized and operated exclusively for educational
purposes.  Effective January 1, 1991, UMIFA was expanded to
include any incorporated or unincorporated educational,
religious, charitable, or other eleemosynary institution or
governmental organization holding funds for such purposes.  As a
result, the University of California and the Campus Foundations
are covered by this legislation.

Among its provisions, UMIFA permits expenditure of net
appreciation, both realized and unrealized, for the purposes for
which an endowment fund is established.  Previously, UMIFA
permitted expenditure of realized net appreciation only.  The
Regents have chosen not to take advantage of UMIFA's new spending
provisions; The Regents continue to authorize expenditures from
income only.  University policy does not prevent the Campus
Foundations from employing UMIFA's new spending provisions.

In addition, with the donor's written consent, the new law
permits the release of restrictions in a charitable gift
instrument on use or investment of institutional funds.  If the
donor's written consent cannot be obtained because of the donor's
death, disability, unavailability, or impossibility of
identification, the governing board may apply in the name of the
institution to the superior court of the county in which the
institution's principal activities are conducted, or other court
of competent jurisdiction, for release of a restriction imposed
by the applicable gift instrument in the use or investment of an
institutional fund.  No court has jurisdiction on an
institutional fund under this part unless the Attorney General of
California is a party to the proceedings.  If the court finds
that the restriction is obsolete or impracticable, it may by
order release the restriction in whole or in part.  A release
under this subdivision may not change an endowment fund to a fund
that is not an endowment fund.

When a campus seeks changes in restrictions on the use or
investment of endowment funds and the donor's written consent 
cannot be obtained, it should submit a proposal to the General
Counsel of the University, who represents the University's
interests to the Attorney General and to the court.  For more
information, see III: E.2, Reallocating Funds.