The recent dramatic drop in the value of many institutional endowment funds has required examination and understanding of the legal rules governing endowments and spending from endowment funds.  Institutions which relied on their ability to spend income and appreciation from endowed funds may find their ability to do so severely restricted with the resulting need to identify other sources of funds, curtail expenditures or obtain modifications of donor restrictions on funds.  Different rules apply and different issues arise depending upon whether an institution is located in a state that has adopted UPMIFA (the Uniform Prudent Management of Institutional Funds Act) or in a state still operating under UMIFA (the Uniform Management of Institutional Funds Act).  One purpose of UPMIFA is to provide greater flexibility to institutions with respect to endowment expenditures than is permitted under UMIFA; but restrictions in both statutes must be respected.  Moreover, the impact of FASB statements and interpretations concerning the classification of endowment funds in institutional financial statements and their relationship to institutional rights and responsibilities under UPMIFA and UMIFA must be understood and taken into account when determining permissible endowment expenditures, and also with respect to other agreements the institution may have made with respect to maintaining unrestricted endowment assets.  Finally, recent events have underlined the importance of appropriate legal due diligence in the selection of investment fund managers and in the review of investment fund agreements.

This virtual seminar will review the key current legal issues affecting college and university endowments, including: