Download as PDF
273.610 Appropriation for expenditure or accumulation of endowment -Rules of construction.
(1)
(2)
(3)
Subject to the intent of a donor expressed in the gift instrument, an institution
may appropriate for expenditure or accumulate so much of an endowment fund
as the institution determines is prudent for the uses, benefits, purposes, and
duration for which the endowment fund is established. Unless stated otherwise
in the gift instrument, the assets in an endowment fund are donor-restricted
assets until appropriated for expenditure by the institution. In making a
determination to appropriate or accumulate, the institution shall act in good
faith, with the care that an ordinarily prudent person in a like position would
exercise under similar circumstances, and shall consider, if relevant, 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 effect of inflation or deflation;
(e) The expected total return from income and the appreciation of
investments;
(f) Other resources of the institution; and
(g) The investment policy of the institution.
To limit the authority to appropriate for expenditure or accumulate under
subsection (1) of this section, a gift instrument must specifically state the
limitation.
Terms in a gift instrument designating a gift as an endowment, or a direction or
authorization in the gift instrument to use only "income," "interest," "dividends,"
or "rents, issues, or profits," or "to preserve the principal intact," or words of
similar import:
(a) Create an endowment fund of permanent duration unless other language
in the gift instrument limits the duration or purpose of the fund; and
(b) Do not otherwise limit the authority to appropriate for expenditure or
accumulate under subsection (1) of this section.
Effective:July 15, 2010
History: Created 2010 Ky. Acts ch. 34, sec. 3, effective July 15, 2010.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.