HARRISBURG – Legislation sponsored by Senator Bob Mensch (R-24) advanced out of the House this week (Oct. 26). Senate Bill 731 would provide protections for annuitants who are donors to a charity that provides for Charitable Gift Annuities.
Charitable Gift Annuities provide donors the opportunity to support a charitable organization while receiving fixed annuity payments. The payments can begin immediately, or the donor can choose to defer the payments to a future date. The terms of the arrangement are set forth in a contract signed by the non-profit and the donor. The arrangement terminates on the death of the annuitant(s), at which point the non-profit uses the remaining funds on its mission.
“It is very difficult for smaller charitable organizations to utilize Charitable Gift Annuities under the current law, because the amount of unrestricted cash or publicly traded securities needed to cover the minimum is impractical and unworkable,” Mensch said. “Under the current law, a smaller foundation or charity must commit a significant amount of foundation resources to the annuity and not to their mission.”
This legislation would amend the Charitable Gift Annuity Exemption Act to allow charities to transfer their risk to a commercial insurance company, which will match substantially all future payments of the charity arising from a charitable gift annuity contract obligation.
This bill passed both chambers and heads to the Governor, where he is expected to sign this bill into law.
For more information on Senator Mensch’s legislation, visit www.senatormensch.com. State updates can also be found on Senator Mensch’s Facebook at facebook.com/PASenatorBobMensch/ or Twitter @SenatorMensch.
CONTACT: Lidia Di Fiore ldifiore@pasen.gov (215) 541-2388