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 in
existence after June 30, 2007.
(b) For an institutional fund in existence before July 1, 2007, this
chapter 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 the
following:
(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 the
community. 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Repealed
(Repealed by P.L.226-2007, SEC.24.)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 an
institutional fund, or any part of the fund, not wholly expendable by
the institution on a current basis under the terms of the applicable
gift instrument. The term does not include assets that an institution
designates 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 is
granted or transferred to or held by an institution as an institutional
fund. 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Repealed
(Repealed by P.L.226-2007, SEC.24.)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 the
following:
(1) A person, other than an individual, that is organized and
operated exclusively for charitable purposes.
(2) The state, including any agency or instrumentality of the
state, or a unit of local government to the extent that the state or
unit holds funds exclusively for charitable purposes.
(3) A trust that has only charitable interests, including a trust:
(A) that previously had both charitable and noncharitable
interests; and
(B) the noncharitable interests of which were previously
terminated. 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 fund
held by an institution exclusively for charitable purposes. The term
does not include the following:
(1) A fund held for an institution by a trustee that is not an
institution.
(2) A fund in which a beneficiary that is not an institution has
an interest, other than possible rights that could arise upon
violation or failure of the purposes of the fund.
(3) Assets held by an institution primarily for charitable
purposes 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, a
corporation, a business trust, an estate, a trust, a partnership, a
limited liability company, an association, a joint venture, a public
corporation, the state of Indiana, a state agency or instrumentality, a
unit 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 that
is:
(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; gift
instrument
Sec. 9. (a) Subject to the terms of a gift instrument, an institution
may appropriate for expenditure or accumulate so much of an
endowment fund that the institution determines is prudent for the
uses, benefits, purposes, and duration of the endowment fund. Except
as provided in a gift instrument, the assets in an endowment fund are
donor 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 acting
in 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 the
appreciation 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 a
limitation on the authority of an institution to appropriate or
accumulate under subsection (a).
(d) A gift instrument that designates a gift as an endowment or
contains 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 the
gift instrument states otherwise; and
(2) does not otherwise limit the authority to appropriate or
accumulate 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, an
institution may modify or release, in whole or in part, a restriction in
a gift instrument on the management, investment, and purpose of an
institutional fund.
(b) A release under this section may not allow an institutional
fund to be used for purposes other than the charitable purposes of the
institution affected.
(c) An institution may petition a court to modify, in a manner
consistent with the donor's intentions to the extent practicable, a
restriction in a gift instrument concerning the management or
investment of an institutional fund if:
(1) the restriction is impracticable or wasteful;
(2) the restriction impairs the management or investment of the
fund; or
(3) due to unanticipated circumstances, the modification will
further the purposes of the institutional fund.
An institution shall notify the attorney general of a petition under this
subsection. A court shall provide the attorney general an opportunity
to be heard on the petition.
(d) An institution may petition a court to modify, in a manner
consistent with the gift instrument, the charitable purpose of a fund
or a restriction on the use of a fund if the charitable purpose or use
becomes unlawful, impracticable, impossible, or wasteful. An
institution shall notify the attorney general of a petition under this
subsection. A court shall provide the attorney general an opportunity
to be heard on the petition.
(e) If an institution determines that a restriction in a gift
instrument on the management, investment, or purpose of an
institutional 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 institution
may release or modify all or part of the restriction if:
(1) the value of the institutional fund subject to the restriction
is 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 gift
instrument. 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 institutional
fund
Sec. 14. (a) An institution that manages or invests an institutional
fund 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 an
institutional 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 a
prudent person acting in a like position would use under similar
circumstances.
(c) An institution that manages or invests an institutional fund:
(1) may only incur costs that are appropriate and reasonable in
relation 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 the
management and investment of the fund.
(d) An institution may pool two (2) or more institutional funds for
purposes of management or investment.
(e) Subject to the terms of a gift instrument, an institution or a
person shall do the following:
(1) An institution that manages or invests an institutional fund
shall consider the following factors:
(A) General economic conditions.
(B) The possible effects of inflation or deflation.
(C) The possible tax consequences of investment decisions
or strategies.
(D) The role of each investment or course of action in
relation to the overall investment portfolio of the
institutional fund.
(E) The expected total return from income and the
appreciation of investments.
(F) Other resources of the institution.
(G) The needs of the institution and institutional fund to
make distributions and to preserve capital.
(H) The relationship or value of an asset to the charitable
purposes of the institution.
(2) An institution shall make management and investment
decisions about an individual asset:
(A) in the context of an institutional fund's portfolio of
investments as a whole and not in isolation; and
(B) as part of an overall investment strategy that has risk and
return objectives reasonably suited to the institutional fund
and to the institution.
(3) Except as otherwise provided in law, an institution may
invest in any kind of property or type of investment.
(4) An institution shall diversify the investments of an
institutional fund unless the institution reasonably determines
that, due to special circumstances, the purposes of the
institutional fund are better served without diversification.
(5) Within a reasonable time after receiving property, an
institution shall:
(A) retain or dispose of the property; or
(B) otherwise rebalance the investment portfolio;
to bring the institutional fund into compliance with the
purposes, terms, and distribution requirements of the institution.
(6) A person that has, or represents to have, special skills or
expertise shall use the skills or expertise to manage or invest
institutional funds.
(7) Notwithstanding any other provision in this chapter, an
institution may retain property contributed by a donor to an
institutional fund as long as the governing board of the
institution 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 as
provided in any other law, an institution may delegate to an agent the
management or investment of an institutional fund. The institution
shall act in good faith and with the care a prudent person acting in a
like position would use under similar circumstances in doing the
following:
(1) Selecting an agent.
(2) Establishing the scope and terms of the delegation, subject
to the purposes of the institution and the institutional fund.
(3) Periodically reviewing the agent's actions to monitor the
agent's performance of and compliance with the scope and
terms of the delegation.
An institution that complies with this subsection is not liable for the
decisions or actions of an agent to whom the management or
investment of an institutional fund is delegated.
(b) An agent shall exercise reasonable care to perform a delegated
function in compliance with the scope and terms of the delegation.
(c) An agent that accepts the delegation of a management or
investment function from an institution submits to the jurisdiction of
Indiana courts in all proceedings concerning the delegation or the
performance of a delegated function.
(d) An institution may delegate management or investment
functions to its committees, officers, or employees as otherwise
provided 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 light
of the facts and circumstances existing at the time a decision is made
or 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 chapter
modifies, limits, and supersedes the Electronic Signatures in Global
and 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 15
U.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, consideration
must be given to the need to promote uniformity of the law with
respect to its subject matter among states that enact it. As added by P.L.226-2007, SEC.21.
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 in
existence after June 30, 2007.
(b) For an institutional fund in existence before July 1, 2007, this
chapter 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 the
following:
(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 the
community. 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 an
institutional fund, or any part of the fund, not wholly expendable by
the institution on a current basis under the terms of the applicable
gift instrument. The term does not include assets that an institution
designates 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 is
granted or transferred to or held by an institution as an institutional
fund. 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 the
following:
(1) A person, other than an individual, that is organized and
operated exclusively for charitable purposes.
(2) The state, including any agency or instrumentality of the
state, or a unit of local government to the extent that the state or
unit holds funds exclusively for charitable purposes.
(3) A trust that has only charitable interests, including a trust:
(A) that previously had both charitable and noncharitable
interests; and
(B) the noncharitable interests of which were previously
terminated. 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 fund
held by an institution exclusively for charitable purposes. The term
does not include the following:
(1) A fund held for an institution by a trustee that is not an
institution.
(2) A fund in which a beneficiary that is not an institution has
an interest, other than possible rights that could arise upon
violation or failure of the purposes of the fund.
(3) Assets held by an institution primarily for charitable
purposes 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, a
corporation, a business trust, an estate, a trust, a partnership, a
limited liability company, an association, a joint venture, a public
corporation, the state of Indiana, a state agency or instrumentality, a
unit 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 that
is:
(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; gift
instrument
Sec. 9. (a) Subject to the terms of a gift instrument, an institution
may appropriate for expenditure or accumulate so much of an
endowment fund that the institution determines is prudent for the
uses, benefits, purposes, and duration of the endowment fund. Except
as provided in a gift instrument, the assets in an endowment fund are
donor 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 acting
in 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 the
appreciation 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 a
limitation on the authority of an institution to appropriate or
accumulate under subsection (a).
(d) A gift instrument that designates a gift as an endowment or
contains 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 the
gift instrument states otherwise; and
(2) does not otherwise limit the authority to appropriate or
accumulate 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, an
institution may modify or release, in whole or in part, a restriction in
a gift instrument on the management, investment, and purpose of an
institutional fund.
(b) A release under this section may not allow an institutional
fund to be used for purposes other than the charitable purposes of the
institution affected.
(c) An institution may petition a court to modify, in a manner
consistent with the donor's intentions to the extent practicable, a
restriction in a gift instrument concerning the management or
investment of an institutional fund if:
(1) the restriction is impracticable or wasteful;
(2) the restriction impairs the management or investment of the
fund; or
(3) due to unanticipated circumstances, the modification will
further the purposes of the institutional fund.
An institution shall notify the attorney general of a petition under this
subsection. A court shall provide the attorney general an opportunity
to be heard on the petition.
(d) An institution may petition a court to modify, in a manner
consistent with the gift instrument, the charitable purpose of a fund
or a restriction on the use of a fund if the charitable purpose or use
becomes unlawful, impracticable, impossible, or wasteful. An
institution shall notify the attorney general of a petition under this
subsection. A court shall provide the attorney general an opportunity
to be heard on the petition.
(e) If an institution determines that a restriction in a gift
instrument on the management, investment, or purpose of an
institutional 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 institution
may release or modify all or part of the restriction if:
(1) the value of the institutional fund subject to the restriction
is 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 gift
instrument. 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 institutional
fund
Sec. 14. (a) An institution that manages or invests an institutional
fund 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 an
institutional 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 a
prudent person acting in a like position would use under similar
circumstances.
(c) An institution that manages or invests an institutional fund:
(1) may only incur costs that are appropriate and reasonable in
relation 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 the
management and investment of the fund.
(d) An institution may pool two (2) or more institutional funds for
purposes of management or investment.
(e) Subject to the terms of a gift instrument, an institution or a
person shall do the following:
(1) An institution that manages or invests an institutional fund
shall consider the following factors:
(A) General economic conditions.
(B) The possible effects of inflation or deflation.
(C) The possible tax consequences of investment decisions
or strategies.
(D) The role of each investment or course of action in
relation to the overall investment portfolio of the
institutional fund.
(E) The expected total return from income and the
appreciation of investments.
(F) Other resources of the institution.
(G) The needs of the institution and institutional fund to
make distributions and to preserve capital.
(H) The relationship or value of an asset to the charitable
purposes of the institution.
(2) An institution shall make management and investment
decisions about an individual asset:
(A) in the context of an institutional fund's portfolio of
investments as a whole and not in isolation; and
(B) as part of an overall investment strategy that has risk and
return objectives reasonably suited to the institutional fund
and to the institution.
(3) Except as otherwise provided in law, an institution may
invest in any kind of property or type of investment.
(4) An institution shall diversify the investments of an
institutional fund unless the institution reasonably determines
that, due to special circumstances, the purposes of the
institutional fund are better served without diversification.
(5) Within a reasonable time after receiving property, an
institution shall:
(A) retain or dispose of the property; or
(B) otherwise rebalance the investment portfolio;
to bring the institutional fund into compliance with the
purposes, terms, and distribution requirements of the institution.
(6) A person that has, or represents to have, special skills or
expertise shall use the skills or expertise to manage or invest
institutional funds.
(7) Notwithstanding any other provision in this chapter, an
institution may retain property contributed by a donor to an
institutional fund as long as the governing board of the
institution 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 as
provided in any other law, an institution may delegate to an agent the
management or investment of an institutional fund. The institution
shall act in good faith and with the care a prudent person acting in a
like position would use under similar circumstances in doing the
following:
(1) Selecting an agent.
(2) Establishing the scope and terms of the delegation, subject
to the purposes of the institution and the institutional fund.
(3) Periodically reviewing the agent's actions to monitor the
agent's performance of and compliance with the scope and
terms of the delegation.
An institution that complies with this subsection is not liable for the
decisions or actions of an agent to whom the management or
investment of an institutional fund is delegated.
(b) An agent shall exercise reasonable care to perform a delegated
function in compliance with the scope and terms of the delegation.
(c) An agent that accepts the delegation of a management or
investment function from an institution submits to the jurisdiction of
Indiana courts in all proceedings concerning the delegation or the
performance of a delegated function.
(d) An institution may delegate management or investment
functions to its committees, officers, or employees as otherwise
provided 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 light
of the facts and circumstances existing at the time a decision is made
or 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 chapter
modifies, limits, and supersedes the Electronic Signatures in Global
and 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 15
U.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, consideration
must be given to the need to promote uniformity of the law with
respect to its subject matter among states that enact it. As added by P.L.226-2007, SEC.21.
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 in
existence after June 30, 2007.
(b) For an institutional fund in existence before July 1, 2007, this
chapter 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 the
following:
(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 the
community. 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 an
institutional fund, or any part of the fund, not wholly expendable by
the institution on a current basis under the terms of the applicable
gift instrument. The term does not include assets that an institution
designates 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 is
granted or transferred to or held by an institution as an institutional
fund. 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 the
following:
(1) A person, other than an individual, that is organized and
operated exclusively for charitable purposes.
(2) The state, including any agency or instrumentality of the
state, or a unit of local government to the extent that the state or
unit holds funds exclusively for charitable purposes.
(3) A trust that has only charitable interests, including a trust:
(A) that previously had both charitable and noncharitable
interests; and
(B) the noncharitable interests of which were previously
terminated. 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 fund
held by an institution exclusively for charitable purposes. The term
does not include the following:
(1) A fund held for an institution by a trustee that is not an
institution.
(2) A fund in which a beneficiary that is not an institution has
an interest, other than possible rights that could arise upon
violation or failure of the purposes of the fund.
(3) Assets held by an institution primarily for charitable
purposes 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, a
corporation, a business trust, an estate, a trust, a partnership, a
limited liability company, an association, a joint venture, a public
corporation, the state of Indiana, a state agency or instrumentality, a
unit 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 that
is:
(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; gift
instrument
Sec. 9. (a) Subject to the terms of a gift instrument, an institution
may appropriate for expenditure or accumulate so much of an
endowment fund that the institution determines is prudent for the
uses, benefits, purposes, and duration of the endowment fund. Except
as provided in a gift instrument, the assets in an endowment fund are
donor 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 acting
in 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 the
appreciation 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 a
limitation on the authority of an institution to appropriate or
accumulate under subsection (a).
(d) A gift instrument that designates a gift as an endowment or
contains 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 the
gift instrument states otherwise; and
(2) does not otherwise limit the authority to appropriate or
accumulate 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, an
institution may modify or release, in whole or in part, a restriction in
a gift instrument on the management, investment, and purpose of an
institutional fund.
(b) A release under this section may not allow an institutional
fund to be used for purposes other than the charitable purposes of the
institution affected.
(c) An institution may petition a court to modify, in a manner
consistent with the donor's intentions to the extent practicable, a
restriction in a gift instrument concerning the management or
investment of an institutional fund if:
(1) the restriction is impracticable or wasteful;
(2) the restriction impairs the management or investment of the
fund; or
(3) due to unanticipated circumstances, the modification will
further the purposes of the institutional fund.
An institution shall notify the attorney general of a petition under this
subsection. A court shall provide the attorney general an opportunity
to be heard on the petition.
(d) An institution may petition a court to modify, in a manner
consistent with the gift instrument, the charitable purpose of a fund
or a restriction on the use of a fund if the charitable purpose or use
becomes unlawful, impracticable, impossible, or wasteful. An
institution shall notify the attorney general of a petition under this
subsection. A court shall provide the attorney general an opportunity
to be heard on the petition.
(e) If an institution determines that a restriction in a gift
instrument on the management, investment, or purpose of an
institutional 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 institution
may release or modify all or part of the restriction if:
(1) the value of the institutional fund subject to the restriction
is 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 gift
instrument. 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 institutional
fund
Sec. 14. (a) An institution that manages or invests an institutional
fund 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 an
institutional 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 a
prudent person acting in a like position would use under similar
circumstances.
(c) An institution that manages or invests an institutional fund:
(1) may only incur costs that are appropriate and reasonable in
relation 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 the
management and investment of the fund.
(d) An institution may pool two (2) or more institutional funds for
purposes of management or investment.
(e) Subject to the terms of a gift instrument, an institution or a
person shall do the following:
(1) An institution that manages or invests an institutional fund
shall consider the following factors:
(A) General economic conditions.
(B) The possible effects of inflation or deflation.
(C) The possible tax consequences of investment decisions
or strategies.
(D) The role of each investment or course of action in
relation to the overall investment portfolio of the
institutional fund.
(E) The expected total return from income and the
appreciation of investments.
(F) Other resources of the institution.
(G) The needs of the institution and institutional fund to
make distributions and to preserve capital.
(H) The relationship or value of an asset to the charitable
purposes of the institution.
(2) An institution shall make management and investment
decisions about an individual asset:
(A) in the context of an institutional fund's portfolio of
investments as a whole and not in isolation; and
(B) as part of an overall investment strategy that has risk and
return objectives reasonably suited to the institutional fund
and to the institution.
(3) Except as otherwise provided in law, an institution may
invest in any kind of property or type of investment.
(4) An institution shall diversify the investments of an
institutional fund unless the institution reasonably determines
that, due to special circumstances, the purposes of the
institutional fund are better served without diversification.
(5) Within a reasonable time after receiving property, an
institution shall:
(A) retain or dispose of the property; or
(B) otherwise rebalance the investment portfolio;
to bring the institutional fund into compliance with the
purposes, terms, and distribution requirements of the institution.
(6) A person that has, or represents to have, special skills or
expertise shall use the skills or expertise to manage or invest
institutional funds.
(7) Notwithstanding any other provision in this chapter, an
institution may retain property contributed by a donor to an
institutional fund as long as the governing board of the
institution 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 as
provided in any other law, an institution may delegate to an agent the
management or investment of an institutional fund. The institution
shall act in good faith and with the care a prudent person acting in a
like position would use under similar circumstances in doing the
following:
(1) Selecting an agent.
(2) Establishing the scope and terms of the delegation, subject
to the purposes of the institution and the institutional fund.
(3) Periodically reviewing the agent's actions to monitor the
agent's performance of and compliance with the scope and
terms of the delegation.
An institution that complies with this subsection is not liable for the
decisions or actions of an agent to whom the management or
investment of an institutional fund is delegated.
(b) An agent shall exercise reasonable care to perform a delegated
function in compliance with the scope and terms of the delegation.
(c) An agent that accepts the delegation of a management or
investment function from an institution submits to the jurisdiction of
Indiana courts in all proceedings concerning the delegation or the
performance of a delegated function.
(d) An institution may delegate management or investment
functions to its committees, officers, or employees as otherwise
provided 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 light
of the facts and circumstances existing at the time a decision is made
or 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 chapter
modifies, limits, and supersedes the Electronic Signatures in Global
and 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 15
U.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, consideration
must be given to the need to promote uniformity of the law with
respect to its subject matter among states that enact it. As added by P.L.226-2007, SEC.21.
