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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.
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