A new state law, the Uniform Prudent Management of Institutional Funds Act (UPMIFA), may allow the WSU Foundation more flexibility in managing its funds.

The UPMIFA provides regulations for the management, investment and spending that charitable organizations like the foundation are allowed to engage in. The UPMIFA also applies to organizations that promote poverty relief, public health, religious organizations and any other purpose beneficial to the community.

One of the benefits of the new law is the ability to pool two or more institutional funds (defined as assets held by an institution for its exclusive use) for management or investment purposes.

“(UPMIFA) allows the foundation to consolidate endowments of up to $75,000,” said Brenda Wilson-Hale, vice president of University Development and chief executive officer for the WSU Foundation. “This allows us to aggregate those funds and to use them in a way that better suits the university today.” She also said the new law gives them the possibility of using the funds available today and applying them immediately.

One of the bigger changes affecting WSU is the removal of the “historic dollar value” from consideration when deciding when to disburse funds. The historic dollar value refers to the original amount of money in the endowment fund, plus any additional donations and increases in value from donations such as real estate.

Where the old law only allowed the disbursal of funds when the value of an endowment was above the historic dollar value, the new law includes no such language. Instead, it requires the institution to consider economic conditions, the purposes of the institution or endowment and other factors.

Another change includes how restrictions placed on gifts may be modified. The old system required either a request in writing from the donor or a finding from a Superior Court from that the restrictions were “obsolete, inappropriate or impracticable.” Now, institutions can request a modification if if the restriction is impracticable or wasteful, impairs the management or investment of the fund or because a modification will further the purposes of the fund due to unforeseen circumstances.

Beth Monteiro, staff attorney and director of board relations and data management for the WSU Foundation, said the main area in which the new law will benefit the university is when no donor agreement is in place after a will to the university has been written by a deceased alumnus.

“This law allows you to look at the funds so that you can expand them and they’re not left unused,” she said. “Where we don’t have gift agreements in place, we’d have to stop distributing. Now we could continue to distribute.” The new legislation also changes the factors governing boards need to consider when managing and investing institutional funds. New language mandates that the following must be considered (when relevant): general economic conditions, the role of each investment within the overall portfolio, the needs of the institution and the amount of money to disburse funds and maintain capital and an asset’s special relationship or value to the charitable purpose of the institution, among others.

Though in the works for four to five years in Washington state, other states have already slowly adopted UPMIFA across the country, said Monteiro. As of last year, about 45 states adopted the law, with Washington state’s implementation coming as one of the last, she said.

Despite the length before adoption, the new legislation is welcome.

“Where we might have had a law to stop the distribution, the new law doesn’t stop the flow of money, so it helps the university’s budget situation,” she said.

The foundation will allocate the funds toward research, student services and scholarships, Monteiro said.

Since its inception in 1979, the WSU Foundation has raised more than $832 million in private gifts and grants in support of programs and initiatives, according to the organization’s Web site.

According to the WSU Foundation Web site, the mission of the organization it to promote, accept and maximize private support for programs, initiatives and properties of WSU and its regional campuses.