402.134. Appropriation for expenditure or accumulation of endowment fund, amount permitted--factors to consider.
Appropriation for expenditure or accumulation of endowment fund,amount permitted--factors to consider.
402.134. 1. Subject to the intent of the donor expressed in the giftinstrument, an institution may appropriate for expenditure or accumulate somuch of an endowment fund as the institution determines is prudent for theuses, benefits, purposes, and duration for which the endowment fund isestablished. Unless otherwise stated in the gift instrument, the assets inan endowment fund are donor-restricted assets until appropriated forexpenditure by the institution. In making a determination to appropriateor accumulate, the institution shall act in good faith with the care thatan ordinary prudent person in a like position would exercise under similarcircumstances and shall consider, if relevant, the following factors:
(1) The duration and preservation of the endowment fund;
(2) The purposes of the institution and the endowment fund;
(3) General economic conditions;
(4) The possible effect of inflation or deflation;
(5) The expected total return from income and the appreciation ofinvestments;
(6) Other resources of the institution; and
(7) The investment policy of the institution.
2. To limit the authority to appropriate for expenditure oraccumulate under subsection 1 of this section, a gift instrument shallspecifically state the limitation.
3. Terms in a gift instrument designating a gift as an endowment, ora direction or authorization in the gift instrument to use only "income","interest", "dividends", or "rents, issues or profits", or to preserve theprincipal intact, or words of that import that:
(1) Create an endowment fund of permanent duration unless otherlanguage in the gift instrument limits the duration or purpose of the fund;and
(2) Do not otherwise limit the authority to appropriate forexpenditure or accumulate under subsection 1 of this section.
(L. 2009 H.B. 239)