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:

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Terms Used In Indiana Code 30-2-12-9

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Donor: The person who makes a gift.
  • 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. See Indiana Code 30-2-12-2
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • 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. See Indiana Code 30-2-12-3
  • institution: means any of the following:

    Indiana Code 30-2-12-5

  • 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. See Indiana Code 30-2-12-6.4
(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.

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