Harrisburg – The Senate today approved legislation sponsored by Sen. Bob Mensch (R-24) that will make it easier for charities and nonprofit organizations to receive large financial gifts to fulfill their missions.
“When neighbors seek to help neighbors, it’s often through local charities, not government,” Mensch said. “However, outdated laws sometimes prevent smaller charities from being able to do their critical work.”
Senate Bill 731 would provide protections for annuitants who are donors to a charity that provides for Charitable Gift Annuities. The measure was approved by a 47-2 vote.
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 nonprofit and the donor. The arrangement terminates on the death of the annuitant, at which point the nonprofit uses the remaining funds on its mission.
Mensch noted that under current law, it is very difficult for smaller charitable organizations to utilize Charitable Gift Annuities, because the amount of unrestricted cash or publicly traded securities needed to cover the minimum is impractical and unworkable. A smaller foundation or charity must commit a significant amount of foundation resources to the annuity and not to its mission.
“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. “This will allow a small nonprofit organization to receive a large charitable gift annuity that they previously may have been prevented from receiving.”
The bill will be sent to the House of Representatives for consideration.
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 firstname.lastname@example.org (215) 541-2388