(a) Subject to the intent of a donor expressed in a gift instrument, an institution, in managing and investing an institutional fund, shall consider the charitable purposes of the institution and the purposes of the institutional fund.
In addition to complying with the duty of loyalty imposed by law other than this part11, each person responsible for managing and investing an institutional fund shall manage and invest the institutional fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.
In managing and investing an institutional fund, an institution:
May incur only costs that are appropriate and reasonable in relation to the assets, thepurposes of the institution, and the skills available to the institution; and
Shall make a reasonable effort to verify facts relevant to the management and investment of the institutional fund.
An institution may pool two or more institutional funds for purposes of managementand investment.
Except as otherwise provided by a gift instrument, the following rules apply:
(1) In managing and investing an institutional fund, the following factors, if relevant, must be considered:
General economic conditions;
The possible effect of inflation or deflation;
The expected tax consequences, if any, of investment decisions or strategies;
The role that each investment or course of action plays within the overall investmentportfolio of the institutional fund;
The expected total return from income and the appreciation of investments;
Other resources of the institution;
The needs of the institution and the institutional fund to make distributions and topreserve capital; and
An asset's special relationship or special value, if any, to the charitable purposes ofthe institution.
Management and investment decisions about an individual asset must be made not inisolation but rather in the context of the institutional fund's portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the institutional fund and to the institution.
Except as otherwise provided by law other than this part 11, an institution may investin any kind of property or type of investment consistent with this section.
An institution shall diversify the investments of an institutional fund unless the institution reasonably determines that, because of special circumstances, the purposes of the institutional fund are better served without diversification.
Within a reasonable time after receiving property, an institution shall make and carryout decisions concerning the retention or disposition of the property or to rebalance a portfolio, in order to bring the institutional fund into compliance with the purposes, terms, and distribution requirements of the institution as necessary to meet other circumstances of the institution and the requirements of this part 11.
A person that has special skills or expertise, or is selected in reliance upon the person's representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing institutional funds.
Source: L. 2008: Entire part R&RE, p. 560, § 1, effective September 1.
Editor's note: This section is similar to former §§ 15-1-1106 and 15-1-1108 as they existed prior to 2008.