Gifting To Charities Would Be Easier Under Bill Passed By Pennsylvania Senate

HARRISBURG — A bill that would make it easier for charities and nonprofit organizations to receive large financial gifts has passed one legislative body in the state General Assembly.

The Pennsylvania Senate on Monday approved legislation that had been sponsored by Sen. Bob Mensch, R-24, that is designed to provide protections for annuitants who donate to charities that provide for charitable gift annuities.

The measure, Senate Bill 731, was approved by a 47-2 vote and now heads to the Pennsylvania House of Representatives for consideration.

"When neighbors seek to help neighbors, it's often through local charities, not government," Mensch said in a statement. "However, outdated laws sometimes prevent smaller charities from being able to do their critical work."

According to Mensch's office, current Pennsylvania law makes it very difficult for smaller charitable organizations to utilize what are known as charitable gift annuities because the amount of unrestricted cash or publicly traded securities needed to cover the minimum is "impractical and unworkable."

The senator says that a smaller foundation or charity must commit a "significant amount of foundation resources to the annuity and not to its mission," according to a news release from Mensch's office.

"Senate Bill 731 would 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," Mensch said in his statement. "This will allow a small nonprofit organization to receive a large charitable gift annuity that they previously may have been prevented from receiving."

Charitable gift annuities enable donors the opportunity to support a charitable organization while at the same time receiving payments in the form of fixed annuities, according to Mensch. The terms of each arrangement are provided for in a contract signed by both the nonprofit and the donor, and sometimes the arrangement terminates on the death of the annuitant, at which point the nonprofit can use the remaining funds on its core mission.

Legislative records show that the proposal is now sitting before the House Commerce Committee.