The Uniform Prudent Management of Institutional Funds Act, as approved by the National Conference of Commissioners on Uniform State Laws

With respect to the management and investment of assets in these funds, UPMIFA requires those who manage and invest assets to do all of the following:

1. Consider the charitable purposes of the institution and the purposes of the institutional fund.

2. Manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.

3. Incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the institution, and the skills available to the institution.

4. Make a reasonable effort to verify facts relevant to the management and investment of the fund.

5. Generally consider general economic conditions; the possible effect of inflation or deflation; the expected tax consequences, if any, of investment decisions or strategies; the role that each investment or course of action plays within the overall investment portfolio of the fund; the expected total return from income and the appreciation of investments; other resources of the institution; the needs of the institution and the fund to make distributions and to preserve capital; and an asset's special relationship or special value, if any, to the charitable purposes of the institution.

Further, with respect to endowment funds held by these institutions, UPMIFA authorizes an institution to appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which the endowment fund is established. In making a determination to appropriate or accumulate, an institution must act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and must consider, if relevant, the duration and preservation of the endowment fund; the purposes of the institution and the endowment fund; general economic conditions; the possible effect of inflation or deflation; the expected total return from income and the appreciation of investments;

other resources of the institution; and the investment policy of the institution.