New York Nonprofits Now Subject to Uniform Prudent Management of Institutional Funds Act
On September 17, 2010, New York became the 46th state to enact the Uniform Prudent Management of Institutional Funds Act (UPMIFA) when Governor David Paterson signed A. 7907-D/S.7448-C into law. If your organization’s fiscal year ends September 30, you will have to act quickly to ensure compliance as the law took effect immediately.
Accounting Management Solutions summarized the impact on New York nonprofits:
“Overall, UPMIFA requires a reclassification of unspent earnings from unrestricted to temporarily restricted, which can have a major impact on financial statements and debt coverage ratio. In addition, the biggest difference between NYPMIFA and other UPMIFA legislation is that NYPMIFA requires organizations to develop written policies. Nonprofit groups, foundations and charitable trusts will be required to adhere to new regulations, creating written financial policies and communicating with all donors with regard to tapping an underwater endowment. Since the law takes effect immediately, organizations whose fiscal year ends on September 30, 2010 need to act now in order to be in compliance with NYPMIFA.”
Background on the Rules can be found at The Nonprofit Times.