Utah Code 51-8-301. Appropriation for expenditure or accumulation of endowment fund
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(1)
Terms Used In Utah Code 51-8-301
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Donor: The person who makes a gift.
- Endowment fund: means an institutional fund, or any part of an institutional fund, not wholly expendable by the institution on a current basis under the terms of a gift instrument. See Utah Code 51-8-102
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Gift instrument: means a record or records, including an institutional solicitation, under which property is granted to, transferred to, or held by an institution as an institutional fund. See Utah Code 51-8-102
- Institution: means :(6)(a) a person, other than an individual, organized and operated exclusively for charitable purposes;(6)(b) a government or a governmental subdivision, agency, or instrumentality to the extent that it holds funds exclusively for a charitable purpose; and(6)(c) a trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated. See Utah Code 51-8-102
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, instrumentality, or any other legal or commercial entity. See Utah Code 51-8-102
- State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
(1)(a) Subject to the intent of a donor expressed in a gift instrument and to Subsection (3), an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines to be prudent for the uses, benefits, purposes, and duration for which the endowment fund is established.(1)(b) Unless stated otherwise in a gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution.(1)(c) In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and shall consider, if relevant, the following factors:(1)(c)(i) the duration and preservation of the endowment fund;(1)(c)(ii) the purposes of the institution and the endowment fund;(1)(c)(iii) general economic conditions;(1)(c)(iv) the possible effect of inflation or deflation;(1)(c)(v) the expected total return from income and the appreciation of investments;(1)(c)(vi) other resources of the institution; and(1)(c)(vii) the investment policy of the institution.
(2) To limit the authority to appropriate for expenditure or accumulate under Subsection (1), a gift instrument must specifically state the limitation.
(3) Terms in a gift instrument designating a gift as an endowment, or a direction or authorization in the gift instrument to use only “income,” “interest,” “dividends,” or “rents, issues, or profits,” or “to preserve the principal intact,” or similar words:
(3)(a) create an endowment fund of permanent duration unless other language in the gift instrument limits the duration or purpose of the fund; and
(3)(b) do not otherwise limit the authority to appropriate for expenditure or accumulate under Subsection (1).