PEPPER
PIKE, Ohio, April 25,
2024 /PRNewswire/ -- Carnegie Investment Counsel, a
leader in investment management for nonprofits and individuals,
understands the critical importance of compliance with the Uniform
Prudent Management of Institutional Funds Act (UPMIFA) for
nonprofit organizations. Ensuring adherence to this legislation
safeguards the assets of charitable institutions and enhances
financial accountability.
UPMIFA provides a statutory framework that governs the
management of invested funds held by charitable institutions. It's
designed to offer guidance on prudent investment and spending of
funds. It outlines how boards of charitable organizations can
manage their funds in the most effective manner possible, while
still maintaining the principle of "prudent management."
Key Aspects of UPMIFA for Nonprofits:
Because UPMIFA is adopted individually by each state, the
requirements varylaw. Generally, the over-arching components of
UPMIFA include:
- Prudent Investment Practices: Funds must be
invested prudently, taking into account economic conditions and the
specific needs of the institution.
- Spending Policies: Adopt spending policies that
consider both the preservation of fund principal and the immediate
needs of the institution.
- Financial Reporting and Audits: Regular financial
reporting and annual independent audits are mandated to promote
transparency.
Discussions on prudent endowment management and generational
equity underscore the need for nonprofits to adjust their policies.
The goal is that future beneficiaries receive equivalent value,
accounting for inflation and changes in economic conditions,
without compromising the fund's longevity.
"Understanding and complying with UPMIFA is not just about
legal adherence—it's about honoring donor intent and ensuring the
sustainability of funds that support vital community services,"
advises Megan Lencoski, Nonprofit
Development Specialist at Carnegie Investment Counsel.
"Compliance ensures both legal adherence and strengthens trust
with donors by demonstrating sound fiscal stewardship."
Nonprofit leaders must be aware of their state's specific UPMIFA
regulations and how they pertain to their organization. Nonprofits
should consult with legal and financial experts to ensure their
investment practices align with UPMIFA requirements. For an
in-depth look at UPMIFA, read our blog post.
About Carnegie Investment Counsel: Carnegie
Investment Counsel is a Registered Investment Advisor that partners
with your nonprofit to provide on your side, transparent investment
management services. By aligning investment strategies with the
unique goals and values of each organization, Carnegie helps
nonprofits thrive and grow their impact for generations to
come.
This commentary is for informational and educational purposes
only. The information has been obtained from sources we believe to
be reliable, but Carnegie has not independently verified the
accuracy or authenticity of the information. Please consult legal
advice as laws and interpretations are subject to change.
Carnegie Investment Counsel ("Carnegie") is a registered
investment adviser under the Investment Advisers Act of 1940.
Registration as an investment adviser does not imply a certain
level of skill or training. For a more detailed discussion about
Carnegie's investment advisory services and fees, please view our
Form ADV and Form CRS by visiting:
https://adviserinfo.sec.gov/firm/summary/150488
Contact: Mindy Mackey at
nonprofit@carnegieinvest.com or 216.367.4114 or visit
https://www.carnegieinvest.com/foundations-and-non-profits.html.
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SOURCE Carnegie Investment Counsel