of UPMIFA called the New York Prudent Management of Institutional Funds Act or NYPMIFA. Impact on nonprofits The major impact of UPMIFA on nonprofit endowments is that they are now allowed to spend from an "underwater" endowment if the governing board determines it is prudent to do so based on seven specific factors. Many states have adopted an optional provision to limit the spending to 7% unless the board can show that the spending meets UPMIFA's standards of prudence. This board-approved spending policy must be based on the average market value of the endowment investments over the 12 quarters (or more) immediately preceding the calculation. This aspect of UPMIFA applies only to permanent restricted endowments, which are restricted by the donor or law. In addition, UPMIFA contains several standards of prudence regarding investing decisions and delegation of investment management. In March and April 2009, the Association of Governing Boards of Universities and Colleges (AGB) conducted a survey of colleges, universities and affiliated foundations in states in which UPMIFA has been enacted to learn how institutions have been managing endowment spending under UPMIFA. The survey found that: On average, 38 percent of the dollar value of participants total endowment pool was underwater as of December 31, 2008. 31.3 percent are continuing distributions in keeping with their normal spending rule 26.8 percent are suspending distributions from funds at or below HDV 15.6 percent are making distributions from underwater funds at some rate less than their normal spending rule by yielding more than interest and dividends 9.5 percent are distributing only interest and dividends Harvey Dale, director of the National Center on Philanthropy and the Law at New York University, said changing the law is long overdue. "There are a lot of more recent funds that have gone underwater because of the current financial tsunami," Dale said. "So what do you do? If you're in a state that still has UMIFA, you're screwed." Rebeka Mazzone, CPA, recommends: "[Today's boards] ... need to consider what spending rules would be reasonable and appropriate in relation to the assets available, the wishes of the donor, the role that each investment or course of action plays within the overall investment portfolio, and the needs of the institution and the fund to make distributions and to preserve capital." Prudence and climate Some, such as former SEC commissioner Bevis Longstreth, whose work informed the drafting of UPMIFA, have proposed