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Research & Reports

Spending and Management of Endowments under UPMIFA

By David Bass



Adoption of the Uniform Prudent Management of Institutional Funds Act (UPMIFA) has fundamentally changed the regulatory context in which boards make decisions regarding spending from underwater endowments.  AGB, in partnership with Commonfund Institute, surveyed 207 institutions in the 46 states and the District of Columbia that have adopted UPMIFA, collecting information about current and prior spending and governance practices.  The survey suggests that UPMIFA has enabled institutions to provide ongoing support for endowed purposes during a period of unprecedented financial hardship.  It also documents significant changes in spending practices following enactment of UPMIFA and suggests that boards may also be adapting other aspects of endowment management in response to the market events of the past two years and changing fiscal circumstances. 

This survey provides the only national data on the ways higher education boards are managing spending under the new law and provides college and university boards and executives with important insights into the ways spending and governance practices are evolving.  Major findings include:

  • 46.9 percent are continuing distributions in keeping with their normal spending rule, an increase of 8.7 percentage points over practice prior to the enactment of UPMIFA;
  • 25.1 percent are discontinuing all distributions from underwater funds, a decrease of 16.4 percentage points from practice prior to UPMIFA;
  • 9.7 percent are distributing only interest and dividends, a decrease of 7.2 percentage points from practice prior to UPMIFA;
  • 12.5 percent employ a threshold or tiered approach to spending or some other flexible methodology; and
  • 6.8 percent of institutions described a flexible process for determining distributions from underwater funds that was used in lieu of or in conjunction with the spending practices listed above.

Related Resources

“What’s a Prudent Payout from an ‘Underwater’ Endowment?” David Bass, Trusteeship, May/June 2009

“Freedom isn’t Free,” John Griswold and William Jarvis, Mission Matters, Spring/Summer 2009 (pdf)

"Asking about Asset Allocation," Viewpoint by William Jarvis, 2009 NACUBO-Commonfund Study of Endowments (pdf) provided here with permission from Commonfund

Financial Accounting Standards Board (FASB Staff Position 117-1): Endowments of Not-for-Profit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures for All Endowment Funds

Other educational materials on UPMIFA and links to state statutes can be found at



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