<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 55-14A-4 - Appropriation for expenditure or accumulation of endowment fund--Rules of construction. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2072968Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2072968SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2072968CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2072968Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2072968DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2072968Normal-000001 { margin-top: 0; margin-bottom: 0; margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-right: 0; } p.s2072968Normal-000002 { margin-top: 0; margin-bottom: 0; text-indent: 0.25in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2072968000003 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2072968SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2072968SCL-000004 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2072968Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=55-14A-4"><span class="s2072968SENU">55-14A-4</span></a><span xml:space="preserve" class="s2072968SENU">. </span><span class="s2072968CL">Appropriation for expenditure or accumulation of endowment fund--Rules of construction.</span></p><p dir="ltr" class="s2072968Normal-000000"><span class="s2072968DefaultParagraphFont">(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:</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(1)    The duration and preservation of the endowment fund;</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(2)    The purposes of the institution and the endowment fund;</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(3)    General economic conditions;</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(4)    The possible effect of inflation or deflation;</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(5)    The expected total return from income and the appreciation of investments;</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(6)    Other resources of the institution; and</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(7)    The investment policy of the institution.</span></p><p dir="ltr" class="s2072968Normal-000002"><span class="s2072968DefaultParagraphFont">(b) To limit the authority to appropriate for expenditure or accumulate under subsection (a), a gift instrument must specifically state the limitation.</span></p><p dir="ltr" class="s2072968Normal-000002"><span class="s2072968DefaultParagraphFont">(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:</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(1)    Create an endowment fund of permanent duration unless other language in the gift instrument limits the duration or purpose of the fund; and</span></p><p dir="ltr" class="s2072968Normal-000001"><span class="s2072968DefaultParagraphFont">(2)    Do not otherwise limit the authority to appropriate for expenditure or accumulate under subsection (a).</span></p><p dir="ltr" class="s2072968Normal"><span xml:space="preserve" class="s2072968000003"> </span></p><p dir="ltr" class="s2072968Normal"><span class="s2072968SCL">Source:</span><span xml:space="preserve" class="s2072968SCL-000004"> SL 2007, ch 283, § 4.</span></p></div></body></html>