Maine Revised Statutes Title 13 Sec. 5103 – Standard of conduct in managing and investing institutional fund
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1. Consideration of purposes. Subject to the intent of a donor expressed in a gift instrument, an institution, in managing and investing an institutional fund, shall consider the charitable purposes of the institution and the purposes of the institutional fund.
[PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
Terms Used In Maine Revised Statutes Title 13 Sec. 5103
- 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 part thereof that, under the terms of a gift instrument, is not wholly expendable by the institution on a current basis. See Maine Revised Statutes Title 13 Sec. 5102
- 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 Maine Revised Statutes Title 13 Sec. 5102
- Historic dollar value: means the aggregate value in dollars of:
A. See Maine Revised Statutes Title 13 Sec. 5102Institution: means :
A. See Maine Revised Statutes Title 13 Sec. 5102Institutional fund: means a fund held by an institution exclusively for charitable purposes. See Maine Revised Statutes Title 13 Sec. 5102 Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency or instrumentality or any other legal or commercial entity. See Maine Revised Statutes Title 13 Sec. 5102
2. Loyalty; good faith; care. In addition to complying with the duty of loyalty imposed by law other than this chapter, each person responsible for managing and investing an institutional fund shall manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.
[PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
3. Costs; facts. In managing and investing an institutional fund, an institution:
A. May incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the institution and the skills available to the institution; and [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
B. Shall make a reasonable effort to verify facts relevant to the management and investment of the fund. [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
[PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
4. Pooling funds. An institution may pool 2 or more institutional funds for purposes of management and investment.
[PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
5. Rules. Except as otherwise provided by a gift instrument, the following rules apply.
A. In managing and investing an institutional fund, the following factors, if relevant, must be considered:
(1) General economic conditions;
(2) The possible effect of inflation or deflation;
(3) The expected tax consequences, if any, of investment decisions or strategies;
(4) The role that each investment or course of action plays within the overall investment portfolio of the fund;
(5) The expected total return from income and the appreciation of investments;
(6) Other resources of the institution;
(7) The needs of the institution and the fund to make distributions and to preserve capital; and
(8) An asset’s special relationship or special value, if any, to the charitable purposes of the institution. [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
B. Management and investment decisions about an individual asset must be made not in isolation but rather in the context of the institutional fund’s portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fund and to the institution. [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
C. Except as otherwise provided by law other than this chapter, an institution may invest in any kind of property or type of investment consistent with this section. [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
D. An institution shall diversify the investments of an institutional fund unless the institution reasonably determines that, because of special circumstances, the purposes of the fund are better served without diversification. [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
E. Within a reasonable time after receiving property, an institution shall make and carry out decisions concerning the retention or disposition of the property or to rebalance a portfolio, in order to bring the institutional fund into compliance with the purposes, terms and distribution requirements of the institution as necessary to meet other circumstances of the institution and the requirements of this chapter. [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
F. A person that has special skills or expertise, or is selected in reliance upon the person’s representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing institutional funds. [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
G. An institution shall track the historic dollar value of its institutional funds. For purposes of this paragraph, “historic dollar value” means the aggregate value in dollars of:
(1) Each endowment fund at the time it became an endowment fund;
(2) Each subsequent donation to the fund at the time the donation is made; and
(3) Each accumulation made pursuant to a direction in the applicable gift instrument at the time the accumulation is added to the fund. [PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
[PL 2009, c. 450, §2 (NEW); PL 2009, c. 450, §3 (AFF).]
SECTION HISTORY
PL 2009, c. 450, §2 (NEW). PL 2009, c. 450, §3 (AFF).