44-15-4. Management of institutional funds for endowment.

Subject to the intent of a donor expressed in the gift instrument or to any express written agreement between a donor and an institution, an institution may appropriate for expenditure or accumulate assets of an endowment fund as the institution determines shall be 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 shall be donor restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate assets, the institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances; shall exercise reasonable care, skill, and caution; and shall consider, if relevant, the following factors:#

1. (1)

   The duration and preservation of the endowment fund;#

2. (2)

   The purposes of the institution and the endowment fund;#

3. (3)

   General economic conditions;#

4. (4)

   The possible effect of inflation or deflation;#

5. (5)

   The expected total return from income and the appreciation of investments;#

6. (6)

   Other resources of the institution;#

7. (7)

   The investment policy of the institution; and#

8. (8)

   Any special circumstances.#

To limit the authority to appropriate assets for expenditure or accumulation under subsection (a) of this Code section, a gift instrument shall 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 other words of similar meaning shall:#

1. (1)

   Create an endowment fund of permanent duration, unless otherwise provided by the gift instrument for limiting the duration of such fund; and#

2. (2)

   Not otherwise limit the authority to appropriate assets for expenditure or accumulation under subsection (a) of this Code section.#