51-8-301 - Appropriation for expenditure or accumulation of endowment fund. - Utah Statutes

51-8-301. Appropriation for expenditure or accumulation of endowment fund.
(1) (a) Subject to the intent of a donor expressed in a gift instrument and to Subsection(4), an institution may appropriate for expenditure or accumulate so much of an endowment fundas the institution determines to be prudent for the uses, benefits, purposes, and duration for whichthe endowment fund is established.
(b) Unless stated otherwise in a gift instrument, the assets in an endowment fund aredonor-restricted assets until appropriated for expenditure by the institution.
(c) In making a determination to appropriate or accumulate, the institution shall act ingood faith, with the care that an ordinarily prudent person in a like position would exercise undersimilar circumstances, and shall consider, if relevant, the following factors:
(i) the duration and preservation of the endowment fund;
(ii) the purposes of the institution and the endowment fund;
(iii) general economic conditions;
(iv) the possible effect of inflation or deflation;
(v) the expected total return from income and the appreciation of investments;
(vi) other resources of the institution; and
(vii) the investment policy of the institution.
(2) To limit the authority to appropriate for expenditure or accumulate under Subsection(1), a gift instrument must specifically state the limitation.
(3) Terms in a gift instrument designating a gift as an endowment, or a direction orauthorization in the gift instrument to use only "income," "interest," "dividends," or "rents,issues, or profits," or "to preserve the principal intact," or similar words:
(a) create an endowment fund of permanent duration unless other language in the giftinstrument limits the duration or purpose of the fund; and
(b) do not otherwise limit the authority to appropriate for expenditure or accumulateunder Subsection (1).

Enacted by Chapter 59, 2007 General Session