UPMIFA
UPMIFA or the “Uniform Prudent Management of Institutional Funds Act”
While UPMIFA primarily addresses the management and investment of endowment funds, it articulates a standard of care that is applicable to all “Institutional funds” which is defined as a fund held by an institution exclusively for charitable purposes.
The standard of care includes:
- Duty to act in good faith and with the care of an ordinary prudent person.
- Duty to diversify investments
- Duty to incur only appropriate and reasonable costs
- Duty to analyze investments in the context of the total portfolio and overall risk-reward objectives
- Duty to verify facts relevant to the management and investment of the fund
- Allows investments of any kind that is not inconsistent with the standard of care
To view the UPMIFA document in its entirety, please click here.