E. Uniform Management of Institutional Funds Act January 1989 Development Policy and Administration Manual Chapter VI. Endowment Funds ************************************************************* 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 If the court finds that the restriction is obsolete or impracticable, it may by order release the restriction in whole or in part.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.