In the past year or two, Texas and many other states, have enacted a version of a new model institutional funds act (UPMIFA). In response, the Financial Accounting Standards Board issued a staff position paper (FAS 117-1) in August 2008. It applies to not-for-profit organizations (including churches) beginning with 2008 year-ends. Many are completely unaware of this new pronouncement which addresses net asset classification as well as enhanced (financial statement) disclosures. In addition to disclosure of more details about endowment activities, the organization must disclose in the notes to its financial statements information about:
1. its governing board's interpretation of the laws pertaining to the endowments,
2. investment policies, and
3. spending policies and how they relate to the organization's investment policies.
In light of the recent securities markets doldrums, many funds have deficiencies that require disclosure as well (not related to new pronouncement, but according to FAS 124.)
The FASB staff position paper is available on line: http://www.fasb.org/pdf/fsp_fas117-1.pdf
Also, in Texas, UPMIFA is technically Chapter 163 of the Texas Property Code: http://tlo2.tlc.state.tx.us/statutes/docs/PR/content/pdf/pr.010.00.000163.00.pdf
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