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Legislature
Sends Governor Patrick Bill on Allowing Non-Profits to Protect Their Bottom Line
The Senate and House voted in support of Senate Bill 2078, the Uniform Prudent Management of Institutional Funds Act (UPMIFA). 36 states have passed similar legislation, which raises the threshold of responsibility for non-profits in managing their assets, while providing greater flexibility to these organizations in managing their endowments. The bill will now go to the Governor and he is expected to sign the bill as soon as this week.
Charitable organizations in Massachusetts have been pressing for passage of UPMIFA by the end of the fiscal year, today June 30, so that they may access its benefits and avoid unnecessary layoffs and liquidation of assets.
“This legislation provides critical support for our non-profits during this tough recession which has brought on severe reductions in program funding and private donations,” Senate President Therese Murray said. “It makes long-overdue updates to endowment management laws, resulting in unprecedented flexibility and efficiencies that will allow charitable organizations to save jobs and sustain critical services for the people of the Commonwealth.”
The bill, filed by Senator Robert O’Leary (D-Barnstable), allows a charitable organization to focus more on the preservation of their organization and not focus on solely preserving their endowments, as current law states. It modernizes the rules governing expenditures from endowment funds, both to provide stricter guidelines on spending from endowment funds and to give institutions the ability to cope more easily with fluctuations in the value of the endowment. It also updates the provisions governing the release and modification of restrictions on charitable funds to permit more efficient management of these funds.
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