The context in which boards are making endowment spending decisions has changed remarkably in the past year. In January 2008, Senators Max Baucus and Charles Grassley, chair and ranking minority member, respectively, of the Senate Finance Committee, cited "explosive college endowment growth" as evidence that college and university boards should review their endowment-payout polices to make sure they reflected "best practices." Since 2006, 31 states have adopted the Uniform Prudent Management of Institutional Funds Act (UPMIFA), and the legislation has been introduced in another 15 states. UPMIFA provides institutions with greater flexibility to distribute funds from endowments that have plunged in value, but it also challenges them to rethink endowment spending practices that may have remained more or less unchanged for decades. Institutions in UPMIFA states have taken advantage of the act, adopting a variety of new spending approaches for "underwater" funds. This article discusses the spending practices under the UPMIFA and describes how institutional and foundation boards are adopting a variety of new spending approaches to deal with "underwater" endowment funds.