In an economy in which many university endowment funds are underwater, the National Association of College and University Business Officers does not believe that a mandatory spending rate for these funds will work. According to John Walda, president of the Association, it is likely that Sen. Charles Grassley (RIowa), a proponent of required spending, will back off his plan for now in order to give universities a chance to show they can prudently invest their funds. The average value of university endowments from July through December was down 20 percent. Mandatory spending would run contrary to an endowment’s mission of keeping donors’ principal intact while spending income and appreciation. The new Uniform Prudent Management of Institutional Funds Act, although not yet adopted by all states, was approved in 2006 and gives charities and foundations much more flexibility with regard to investments. States that have adopted the Act are now able to continue to spend from underwater endowments, so they can support the operating revenue needs of their institutions. According to the Council on Foundations, one disturbing trend is that some community foundations with endowed advised funds are looking at net asset reallocation.