New Mexico § 46-9A-4 - Appropriation for expenditure or accumulation of an endowment fund; rules of construction

§ 46-9A-4. Appropriation for expenditure or accumulation of an endowment fund; rules of construction

A. 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: (1) the duration and preservation of the endowment fund; (2) the purposes of the institution and the endowment fund; (3) general economic conditions; (4) the possible effect of inflation or deflation; (5) the expected total return from income and the appreciation of investments; (6) other resources of the institution; and (7) the investment policy of the institution. B. To limit the authority to appropriate for expenditure or accumulate pursuant to

Subsection A of this section, a gift instrument shall specifically state the limitation. C. 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: (1) create an endowment fund of permanent duration unless other language in the gift

instrument limits the duration or purpose of the fund; and (2) do not otherwise limit the authority to appropriate for expenditure or accumulate

pursuant to Subsection A of this section.