CHAPTER 12. UNIFORM MANAGEMENT OF INSTITUTIONAL FUNDS
IC 30-2-12
Chapter 12. Uniform Management of Institutional Funds
IC 30-2-12-1
Application of chapter
Sec. 1. (a) This chapter applies to an institutional fund inexistence after June 30, 2007.
(b) For an institutional fund in existence before July 1, 2007, thischapter applies only to decisions made or actions taken after June 30,2007.
As added by P.L.268-1989, SEC.1. Amended by P.L.226-2007,SEC.7.
IC 30-2-12-1.3
"Charitable purpose" defined
Sec. 1.3. As used in this chapter, "charitable purpose" means thefollowing:
(1) Relief of poverty.
(2) Advancement of education.
(3) Advancement of religion.
(4) Promotion of health.
(5) Promotion of a governmental purpose.
(6) Any other purpose the achievement of which benefits thecommunity.
As added by P.L.226-2007, SEC.8.
IC 30-2-12-1.5
Repealed
(Repealed by P.L.226-2007, SEC.24.)
IC 30-2-12-2
"Endowment fund" defined
Sec. 2. As used in this chapter, "endowment fund" means aninstitutional fund, or any part of the fund, not wholly expendable bythe institution on a current basis under the terms of the applicablegift instrument. The term does not include assets that an institutiondesignates as an endowment fund for the institution's use.
As added by P.L.268-1989, SEC.1. Amended by P.L.226-2007,SEC.9.
IC 30-2-12-3
"Gift instrument" defined
Sec. 3. As used in this chapter, "gift instrument" means a record,including any institutional solicitations, under which property isgranted or transferred to or held by an institution as an institutionalfund.
As added by P.L.268-1989, SEC.1. Amended by P.L.226-2007,SEC.10.
IC 30-2-12-4 Repealed
(Repealed by P.L.226-2007, SEC.24.)
IC 30-2-12-5
"Institution" defined
Sec. 5. As used in this chapter, "institution" means any of thefollowing:
(1) A person, other than an individual, that is organized andoperated exclusively for charitable purposes.
(2) The state, including any agency or instrumentality of thestate, or a unit of local government to the extent that the state orunit holds funds exclusively for charitable purposes.
(3) A trust that has only charitable interests, including a trust:
(A) that previously had both charitable and noncharitableinterests; and
(B) the noncharitable interests of which were previouslyterminated.
As added by P.L.268-1989, SEC.1. Amended by P.L.199-1991,SEC.1; P.L.266-1995, SEC.2; P.L.2-2007, SEC.356; P.L.226-2007,SEC.11; P.L.3-2008, SEC.227.
IC 30-2-12-6
"Institutional fund" defined
Sec. 6. As used in this chapter, "institutional fund" means a fundheld by an institution exclusively for charitable purposes. The termdoes not include the following:
(1) A fund held for an institution by a trustee that is not aninstitution.
(2) A fund in which a beneficiary that is not an institution hasan interest, other than possible rights that could arise uponviolation or failure of the purposes of the fund.
(3) Assets held by an institution primarily for charitablepurposes and not primarily for investment purposes.
As added by P.L.268-1989, SEC.1. Amended by P.L.266-1995,SEC.3; P.L.226-2007, SEC.12.
IC 30-2-12-6.4
"Person" defined
Sec. 6.4. As used in this chapter, "person" means an individual, acorporation, a business trust, an estate, a trust, a partnership, alimited liability company, an association, a joint venture, a publiccorporation, the state of Indiana, a state agency or instrumentality, aunit of local government, or any other legal or commercial entity.
As added by P.L.226-2007, SEC.13.
IC 30-2-12-6.7
"Record" defined
Sec. 6.7. As used in this chapter, "record" means information thatis:
(1) inscribed on a tangible medium; or (2) stored in an electronic or other medium; and
is retrievable in a perceivable form.
As added by P.L.226-2007, SEC.14.
IC 30-2-12-7
Repealed
(Repealed by P.L.226-2007, SEC.24.)
IC 30-2-12-8
Repealed
(Repealed by P.L.226-2007, SEC.24.)
IC 30-2-12-9
Appropriation or accumulation of endowment funds; giftinstrument
Sec. 9. (a) Subject to the terms of a gift instrument, an institutionmay appropriate for expenditure or accumulate so much of anendowment fund that the institution determines is prudent for theuses, benefits, purposes, and duration of the endowment fund. Exceptas provided in a gift instrument, the assets in an endowment fund aredonor restricted until appropriated by the institution.
(b) In determining to appropriate or accumulate endowment funds,an institution shall:
(1) act in good faith and with the care a prudent person actingin a like position would use under similar circumstances; and
(2) consider the following factors:
(A) The duration and preservation of the endowment fund.
(B) The purposes of the institution and the endowment fund.
(C) General economic conditions.
(D) The possible effects of inflation or deflation.
(E) The expected total return from income and theappreciation of investments.
(F) Other resources of the institution.
(G) The investment policy of the institution.
(c) To be effective, a gift instrument must specifically state alimitation on the authority of an institution to appropriate oraccumulate under subsection (a).
(d) A gift instrument that designates a gift as an endowment orcontains a direction or authorization to use only income, interest,dividends, rents, issues, or profits, or to preserve the principal intact,or a similar direction:
(1) creates an endowment fund of permanent duration unless thegift instrument states otherwise; and
(2) does not otherwise limit the authority to appropriate oraccumulate under subsection (a).
As added by P.L.268-1989, SEC.1. Amended by P.L.226-2007,SEC.15.
IC 30-2-12-10
Repealed (Repealed by P.L.226-2007, SEC.24.)
IC 30-2-12-11
Repealed
(Repealed by P.L.226-2007, SEC.24.)
IC 30-2-12-12
Repealed
(Repealed by P.L.226-2007, SEC.24.)
IC 30-2-12-13
Modification or release of restrictions in gift instrument;modification of charitable purpose; notice to attorney general
Sec. 13. (a) With the consent of the donor in a record, aninstitution may modify or release, in whole or in part, a restriction ina gift instrument on the management, investment, and purpose of aninstitutional fund.
(b) A release under this section may not allow an institutionalfund to be used for purposes other than the charitable purposes of theinstitution affected.
(c) An institution may petition a court to modify, in a mannerconsistent with the donor's intentions to the extent practicable, arestriction in a gift instrument concerning the management orinvestment of an institutional fund if:
(1) the restriction is impracticable or wasteful;
(2) the restriction impairs the management or investment of thefund; or
(3) due to unanticipated circumstances, the modification willfurther the purposes of the institutional fund.
An institution shall notify the attorney general of a petition under thissubsection. A court shall provide the attorney general an opportunityto be heard on the petition.
(d) An institution may petition a court to modify, in a mannerconsistent with the gift instrument, the charitable purpose of a fundor a restriction on the use of a fund if the charitable purpose or usebecomes unlawful, impracticable, impossible, or wasteful. Aninstitution shall notify the attorney general of a petition under thissubsection. A court shall provide the attorney general an opportunityto be heard on the petition.
(e) If an institution determines that a restriction in a giftinstrument on the management, investment, or purpose of aninstitutional fund is unlawful, impracticable, impossible, or wasteful,the institution shall notify the attorney general. Not more than sixty(60) days after providing notice under this subsection, the institutionmay release or modify all or part of the restriction if:
(1) the value of the institutional fund subject to the restrictionis less than twenty-five thousand dollars ($25,000);
(2) the institutional fund was established more than twenty (20)years earlier; and
(3) the institution uses the institutional fund in a manner
consistent with the charitable purposes expressed in the giftinstrument.
As added by P.L.268-1989, SEC.1. Amended by P.L.199-1991,SEC.3; P.L.226-2007, SEC.16.
IC 30-2-12-14
Duties of person or institution managing or investing institutionalfund
Sec. 14. (a) An institution that manages or invests an institutionalfund shall consider the following:
(1) The intent of a donor expressed in a gift instrument.
(2) The charitable purposes of the institution.
(3) The purposes of the institutional fund.
(b) A person who is responsible for managing or investing aninstitutional fund shall:
(1) comply with the duty of loyalty imposed by any law; and
(2) manage or invest the fund in good faith and with the care aprudent person acting in a like position would use under similarcircumstances.
(c) An institution that manages or invests an institutional fund:
(1) may only incur costs that are appropriate and reasonable inrelation to:
(A) the assets of;
(B) the purposes of; and
(C) the skills available to;
the institution; and
(2) shall make a reasonable effort to verify facts relevant to themanagement and investment of the fund.
(d) An institution may pool two (2) or more institutional funds forpurposes of management or investment.
(e) Subject to the terms of a gift instrument, an institution or aperson shall do the following:
(1) An institution that manages or invests an institutional fundshall consider the following factors:
(A) General economic conditions.
(B) The possible effects of inflation or deflation.
(C) The possible tax consequences of investment decisionsor strategies.
(D) The role of each investment or course of action inrelation to the overall investment portfolio of theinstitutional fund.
(E) The expected total return from income and theappreciation of investments.
(F) Other resources of the institution.
(G) The needs of the institution and institutional fund tomake distributions and to preserve capital.
(H) The relationship or value of an asset to the charitablepurposes of the institution.
(2) An institution shall make management and investmentdecisions about an individual asset: (A) in the context of an institutional fund's portfolio ofinvestments as a whole and not in isolation; and
(B) as part of an overall investment strategy that has risk andreturn objectives reasonably suited to the institutional fundand to the institution.
(3) Except as otherwise provided in law, an institution mayinvest in any kind of property or type of investment.
(4) An institution shall diversify the investments of aninstitutional fund unless the institution reasonably determinesthat, due to special circumstances, the purposes of theinstitutional fund are better served without diversification.
(5) Within a reasonable time after receiving property, aninstitution shall:
(A) retain or dispose of the property; or
(B) otherwise rebalance the investment portfolio;
to bring the institutional fund into compliance with thepurposes, terms, and distribution requirements of the institution.
(6) A person that has, or represents to have, special skills orexpertise shall use the skills or expertise to manage or investinstitutional funds.
(7) Notwithstanding any other provision in this chapter, aninstitution may retain property contributed by a donor to aninstitutional fund as long as the governing board of theinstitution considers it advisable.
As added by P.L.226-2007, SEC.17.
IC 30-2-12-15
Delegation of management or investment of institutional fund;duties of agent
Sec. 15. (a) Subject to the terms of a gift instrument and except asprovided in any other law, an institution may delegate to an agent themanagement or investment of an institutional fund. The institutionshall act in good faith and with the care a prudent person acting in alike position would use under similar circumstances in doing thefollowing:
(1) Selecting an agent.
(2) Establishing the scope and terms of the delegation, subjectto the purposes of the institution and the institutional fund.
(3) Periodically reviewing the agent's actions to monitor theagent's performance of and compliance with the scope andterms of the delegation.
An institution that complies with this subsection is not liable for thedecisions or actions of an agent to whom the management orinvestment of an institutional fund is delegated.
(b) An agent shall exercise reasonable care to perform a delegatedfunction in compliance with the scope and terms of the delegation.
(c) An agent that accepts the delegation of a management orinvestment function from an institution submits to the jurisdiction ofIndiana courts in all proceedings concerning the delegation or theperformance of a delegated function. (d) An institution may delegate management or investmentfunctions to its committees, officers, or employees as otherwiseprovided by law.
As added by P.L.226-2007, SEC.18.
IC 30-2-12-16
Determination of compliance
Sec. 16. Compliance with this chapter shall be determined in lightof the facts and circumstances existing at the time a decision is madeor action is taken and not by hindsight.
As added by P.L.226-2007, SEC.19.
IC 30-2-12-17
Effect on existing law
Sec. 17. (a) Except as provided in subsection (b), this chaptermodifies, limits, and supersedes the Electronic Signatures in Globaland National Commerce Act, 15 U.S.C. 7001 et seq.
(b) This chapter does not:
(1) modify, limit, or supersede 15 U.S.C. 7001(a); or
(2) authorize electronic delivery of a notice described in 15U.S.C. 7003(b).
As added by P.L.226-2007, SEC.20.
IC 30-2-12-18
Consideration for uniformity of law
Sec. 18. In applying and construing this chapter, considerationmust be given to the need to promote uniformity of the law withrespect to its subject matter among states that enact it.
As added by P.L.226-2007, SEC.21.