Slowly, more and more New York charities are finally waking up to NYPMIFA (see older posts if you are wondering what NYPMIFA or UPMIFA are – see my category listing for Endowments). By waking up, I don’t mean the joyful hoping out of bed type of waking up.
I know this because of the questions coming in and it is one of most popular “search” terms finding this website.
So, for all of the readers looking for NYPMIFA guidance, here are two questions that have come up consistently and the answers (based on what I am hearing from other attorneys and my own reading of the law – as always, consult your own attorney).
- If we don’t ever plan to dip into historic gift principal, do we need to send those NYPMIFA notices to pre-NYMIFA funds? Answer: No, you only need to send the notices when your institution intends to utilize the invasion of principal aspect of NYPMIFA to pre-NYPMIFA funds with available donors (i.e. alive and locatable).
- If we don’t plan on ever dipping into historic gift principal on pre-NYPMIFA funds, do we still need to apply the 8 factor analysis to those old funds? Answer: YES (this is not so clear in the law but after going over this numerous times, it seems to me as well as others that NYPMIFA redefined prudence for endowment management purposes – this point could go either way but it would make sense to use the 8 factor regardless of the fund rather than attempting to have a two types of analyses).
Next week, I should be able to post specific instructions from the NY AG’s office on how to use the 20+ year old/under $100,000 endowment cleanup rules from NYPMIFA.