One problem that some arts organizations and other nonprofits face is that they can’t get to the money in their endowment. Because of the market collapse, some endowments (particularly those created relatively recently) are now worth less than their “historic dollar value,” i.e., the value of the gifts originally given to create the endowment. Under a badly-designed state law (known as the “Uniform Management of Institutional Funds Act,” or UMIFA), that means that all expenditures from the endowment are prohibited until the endowment’s value rises above the historic dollar value.
Many states have adopted a revision of UMIFA, known as UPMIFA (the “P” stands for “Prudent”), which would allow some access to endowments funds under these circumstances. That could save jobs, and could even save arts institutions from collapse. It seems silly to watch an organization fold while it has millions of dollars in the bank.
The state Senate passed UPMIFA last week. If the House passes it before the end of the session, then local arts organizations could benefit substantially. Best of all, this costs the state nothing, since it’s simply giving the organizations access to money they already have but can’t use under current law.
Here is more information on this from the Mass. Advocates for the Arts, Sciences, and Humanities (MAASH) (email, no link):
Contact your legislator today to urge them to support UPMIFA–needed reform in our public charity laws!
This bill will save jobs immediately and provide economic relief for cultural organizations of all sizes.
And, it will not cost the state a single penny!
Click here or paste this web address into your browser to send an e-mail right away. (It only takes a few moments)
http://capwiz.com/artsusa/ma/i…
The Uniform Prudent Management of Institutional Funds Act (UPMIFA) will insure that public charities use the best investment practices of endowments while giving the charities more flexibility in using resources to meet critical needs. Under current laws, a public charity cannot use so called “underwater” endowment funds, where market losses have driven the fund value below its principal.
UPMIFA will free these funds to provide charities with desperately needed operating cash to maintain jobs and services. Because the non-profit sector is already shedding jobs, we are asking the Legislature to pass UPMIFA before July 1 to halt imminent layoffs. 14% of the Massachusetts work force is employed by non-profits.
UPMIFA has already been adopted by 31 states with pending legislation in 15 others. Drafted by the national Uniform Law Commission (www.upmifa.org), UPMIFA is endorsed by the American Bar Association, The National Conference of Commissioners on Uniform State Laws, The National Association of College and University Business Officers, and many Massachusetts organizations: including the Massachusetts Advocates for the Arts, Sciences and Humanities (MAASH);
We thank you again for your advocacy on this critical issue that will cost the state nothing, but will save many jobs across the Commonwealth.
If you have a sec, let your state rep hear from you about UPMIFA. It’s not the hottest item on the current agenda, to be sure, but it’s still important to a lot of people around here (as the MAASH email notes, nonprofits employ about 14% of MA’s workforce). The arts are good for the soul, and also good for the economy.
Disclosure: As a professional musician, I receive income from arts organizations that could benefit from the passage of UPMIFA. Also, my wife and I both serve on the boards of arts organizations that could benefit from the passage of UPMIFA.
the best musical I’ve ever seen was Aida at the NSMT. They did a lot of good stuff and that fire just killed them, once the economy went sour.