Probing UPMIFA: The Mysteries of the Uniform Act in Light of Federal Tax and State Charity Laws and Concepts

25 Pages Posted: 27 Jun 2013

Abstract

The Uniform Prudent Management of Institutional Funds Act ("UPMIFA") is the most important source of law governing the investment, management and expenditure of funds held by charities. Recently enacted in the vast majority of the states, UPMIFA generally applies consistent and modernized standards for administering charitable funds, regardless of the form of charity holding them. Although UPMIFA is a well-drafted statute that significantly improves the management of institutional funds under prior law, the model act and some of its variations adopted by the states present a host of interesting questions that have yet to be explored fully in the academic literature. This article discusses several enigmatic legal questions raised by the explicit requirements of UPMIFA or by limitations implicit in its scope. These questions range from those that are practical, and even quite technical, to those that are more policy-oriented and normative. Some of these questions raise issues that donors and charities can resolve by carefully drafting gift instruments. When a drafting solution is unavailable, the issues will require judicial resolution or legislative action. This article offers drafting solutions for lawyers, interpretative analysis for judges, and normative guidance for state legislatures.

Keywords: UPMIFA, Uniform Prudent Management of Institutional Funds Act, charitable trusts, nonprofit corporations, fiduciary duties, cy pres, endowment fund, donor restrictions, restricted gift, gift instrument, tax-exempt, section 501(c)(3), charity

Suggested Citation

Buckles, Johnny Rex, Probing UPMIFA: The Mysteries of the Uniform Act in Light of Federal Tax and State Charity Laws and Concepts. 46 Real Property, Trust and Estate Law Journal 281 (2011), U of Houston Law Center No. 2013-A-7, Available at SSRN: https://ssrn.com/abstract=2285618

Johnny Rex Buckles (Contact Author)

University of Houston Law Center ( email )

4604 Calhoun Road
4604 Calhoun Road
Houston, TX 77204-6060
United States

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