Stroock Special Bulletin
"New York Prudent Management of Institutional Funds Act"
On September 17, 2010, New York enacted the New York Prudent Management of Institutional Funds Act ("NYPMIFA" or the "Act"), a modified version of the Uniform Prudent Management of Institutional Funds Act ("UPMIFA"). All of its requirements became effective immediately.
NYPMIFA imposes new duties on governing boards of New York-formed nonprofits, imposes new restrictions on the management of "institutional funds" held by such nonprofits, and liberalizes rules on endowment fund spending by such nonprofits.
Although the Act imposes some burdensome duties on all New York nonprofits, enactment of this new law comes as good news to nonprofits with "underwater endowments" (i.e., endowments that have a current dollar value below the level in place at the time of the original grant), because some of the restrictions they faced in invading the "historic dollar value" of endowment funds are now liberalized.
This Stroock Special Bulletin highlights some of the key provisions of the Act and notes where they differ from the provisions of UPMIFA.