On September 17, 2010, New York adopted the New York Prudent Management of Institutional Funds Act (the “Act”),1 dramatically changing and updating New York law concerning the management and investment of institutional funds2 and spending of endowment funds.3 The Act applies to all organizations defined as “institutions”4 under the Act, such as public charitable organizations, private foundations and practically every corporation formed under the New York Not-For-Profit Corporation Law (“N-PCL”), including non-charitable membership organizations such as athletic, social, professional and civic organizations formed as corporations under the N-PCL. The Act is effective immediately and applies to institutional funds existing on or established after the effective date of the Act, and to decisions made or actions taken subsequent to enactment, subject to the exceptions noted below. In particular, the Act will require institutions to review investment, management and endowment spending policies. Specifically, the Act provides...
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