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Public Policy

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Legislative and regulatory issues of interest to our members.  If you would like to view our archived articles, click here.

New York Exempts Charities Issuing Gift Annuities from Cybersecurity Regulations

On February 13, 2017, the New York State Department of Financial Services (“DFS”) adopted final regulations concerning cybersecurity requirements for financial services companies. The regulations took effect on March 1, 2017.

The DFS first issued the proposed regulations in September 2016. After a 45-day comment period, the DFS published updated proposed regulations in December 2016 and allowed 30 additional days for comments. The regulations, as drafted, would have applied to charitable organizations holding special permits to issue gift annuities in New York State. The regulations would have required charitable organizations issuing gift annuities to appoint a Chief Information Security Officer, or hire a third party to fulfill this duty, implement a written cybersecurity policy, develop a plan for disposal of nonpublic information, and conduct periodic risk assessments. Entities which failed to meet these extensive requirements would face undefined penalties. Most issuers of gift annuities outsource administration to banks or trust companies, which are themselves subject to the regulations. Requiring compliance from the charitable sector would create a redundancy.

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The Legacy IRA HR 5171

The Board of Directors of the American Council on Gift Annuities is excited to join the remainder of the charitable community in announcing the introduction of HR 5171, The Legacy IRA.

This bill will extend the right of American taxpayers to use portions of their Individual Retirement Accounts to fund Charitable Remainder Trusts and Charitable Gift Annuities during their lifetime. This compliments and completes the provisions of the PATH Act of 2015 which made the use of IRA assets for lifetime outright gifts permanent.

Click here for a copy of the Bill and click here for a full discussion of its implications for your donors.

Also begin immediately contacting your Congressmen and Senators and ask them to become co-sponsors of HR 5171. NOW IS THE TIME WE HAVE WAITED FOR DURING THE LAST SEVERAL DECADES!. You are a vital part of making The Legacy IRA a reality. Do your part now!

Click here to view ACGA”s letter to The Honorable Peter Roskam in support of The Legacy IRA.

Charitable IRA Initiative

charitableiraYOU have the opportunity to take action that would be helpful to charities throughout the USA!  The charitable community has the unique opportunity to focus the power of donors around the country on passage of legislation that will simplify the process and the tax liability when donating IRA assets to charity. 

At the middle of 2014 it was estimated that $6,421,000,000,000 (that’s Trillions) was being held in IRA accounts.   Estimates further indicate that approximately 47% of all households in the USA hold 25% of all mutual funds through their personal traditional IRA accounts.

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Progress Report: Charitable IRA Initiative

The Charitable IRA Initiative is a 501(c)(4) organization created to pursue legislation that would expand and make permanent the Charitable IRA Rollover.  Following is the first of periodic reports you may expect to receive regarding progress in achieving this objective.

This report has been drafted by Conrad Teitell, pro bono counsel to the Charitable IRA Initiative, who is leading the legislative effort.  Conrad Teitell has served for many years as volunteer counsel to the American Council on Gift Annuities.

“The Charitable IRA Initiative continues actively to seek legislation that would make the expired direct Charitable IRA Rollover permanent and expanded to include life income gifts.

“Our recent activities:  meetings in Washington D.C. in April and May with key legislators and their aides, plus a meeting with Ways and Means Committee staff members.  We have also had two meetings with staff of the Joint Committee on Taxation (“JCT”).  These are hard-to-get meetings.  Congress wants to know the cost (called “the score”) of the proposed legislation.  The JCT gets over 10,000 requests per year for scores and, we are told, can only score a few hundred bills.  The congressman and senator who have asked that our bill be scored have been told that we will have a score in June.  We were fortunate in being able to meet the JCT and give them our reasons why the life income provision could have a neutral or positive score.

“It has been a cliché that the two things one should not see being made are sausages and laws.  The U.S. Senate demonstrated this just recently by making the America Gives More Act (H.R. 644) passed by a two-thirds majority in the House and put on the Senate calendar – disappear from the face of the earth.

“How could that be?  It takes 60 votes to be placed on the Senate calendar.  The Senate was debating the Pacific trade bill, but didn’t have 60 votes.  However, there was the America Gives More Act (that would make the direct Charitable IRA Rollover and a few other charitable provisions permanent) sitting on its calendar.  PRESTO: the title of the bill was changed to a trade bill title, all of the charitable provisions were removed, and the trade provisions were substituted.

“Bottom line:  There is no longer a bill passed by the House and before the Senate that makes permanent the direct Charitable IRA Rollover.  For this reason, we believe our efforts to make permanent the expired law and expand it takes on additional and timely importance.

“We will be back in Washington for two days in June to press our case.”

Charitable IRA Initiative Press Release

FOR IMMEDIATE RELEASE

March 31, 2015

(Washington D.C.)    A group of national leaders in planned giving and philanthropy have formed the Charitable IRA Initiative, a 501(c) 4) non-profit organization with the sole purpose of encouraging members of the U. S. Congress and the President to enact permanent legislation enabling owners of IRAs to transfer their IRA assets to the American charities. IRA rollovers could be outright gifts up to $100,000 per year or life income agreements up to $500,000/year.  There are no income taxes on IRA charitable rollovers.

Lindsay Lapole, Chairman of the American Council on Gift Annuities, is the president of the Charitable IRA Initiative; Michael Kenyon, President/CEO of the Partnership for Philanthropic Planning is vice president; John Pierce, Senior Gift Planner, Concordia College, Moorhead, MN, is secretary; and Sister Georgette Lehmuth, President/CEO of the National Catholic Development Conference, is treasurer.  Conrad Teitell serves as the volunteer legal counsel to the Charitable IRA Initiative.

Lapole says, “IRA rollover legislation, allowing outright gifts of IRAs up to $100,000/year, enacted in 2006.  It has been periodically renewed and resulted in substantial gifts to America’s charities.  The temporary nature of IRA renewal bills has dampened the growth of IRA gifts to America’s non-profit organizations.  These are the very organizations upon which we all rely to deliver human services, provide education, health services, support the arts, conservation and so many other services that play key roles in providing the quality of life Americans hold dear.”

“Our dual agenda items are to first make the outright gift IRA rollover provision permanent. This will allow IRA owners 70½ years and older to give $100,000 annually  in outright gifts from their personal IRA accounts without having to wait until late December to receive word from Congress and the White House.  Further, the expansion of the legislation will also allow IRA owners 59 ½ and older to create life income agreements with portions of their IRA assets up to a limit of $500,000 annually.  These agreements will pay income to those IRA owners and their spouses for life, often with a larger payout (5% minimum in the case of charitable trusts) than their IRA required minimum distribution (RMD).   At the same time these donors will be taking the opportunity of having a phenomenally positive impact on America’s needy.  Because these IRA rollover gifts are not deductible, we believe that permanent and life-income IRA rollovers will be revenue neutral or even positive to the Treasury.”

Click here to download a copy of the press release.

The American Council on Gift Annuities (ACGA) was formed in 1927, to actively promote responsible philanthropy through actuarially sound charitable gift annuity rate recommendations, quality training opportunities and the advocacy of appropriate consumer protection. ACGA is sponsored by over 1,000 social welfare charities, health organizations, environmental organizations, colleges, universities, religious organizations and other charities.  Contact Information: The American Council on Gift Annuities, 1260 Winchester Parkway, SE, Suite 205 Smyrna, GA 30080-6546, phone: (770) 874-3355, email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Call to Action: ACGA and NCDC Statement to the Senate Finance Committee on the Charitable IRA Initiative

The American Council on Gift Annuities, along with the National Catholic Development Conference,  with the support of Conrad Teitell as volunteer legal counsel, submitted a statement to the Senate Finance Committee on the Charitable IRA Initiative. Click here to read a copy of the statement that was submitted.

The ACGA encourages each of you, our sponsors, to reach out and submit your own statement to the SFC by April 15th.  Click here for an article written by Conrad Teitell in the April issue of Taxwise which includes information on how to submit your own statement.

Please contact us immediately if you have a relationship with a "working group" Senator in any of the following states.  This will give the Charitable IRA Initiative the opportunity to follow up.  The group’s co-chairs are Senators Grassley (R-IA), Enzi (R-WY) and Stabenow (D-MI). The other members are Senators Crapo (R-ID), Cornyn (R-TX), Toomey (R-PA), Schumer (D-NY), Nelson (D-FL), Menendez (D-NJ) and Bennet (D-CO).  

Your participation in this effort can help make a difference.

IRA Charitable Rollover Legislation Signed

Today, President Barack Obama signed legislation to reinstate retroactively the IRA charitable rollover. While the timeline for making IRA charitable rollover gifts is tight (the reinstatement expires January 1, 2015), it is not too late to let your donors know that they still have time to take advantage of this gifting opportunity. The provision allows each IRA owner who is 70 1/2 or older to make direct transfers of up to a total of $100,000 per year to one or more qualified charities. The IRA charitable rollover is tax-free and not included in adjusted gross income. For more information and planning thoughts, please watch the video presentation from Emanuel J. Kallina II, J.D., LL.M., Managing Member of Kallina & Associates, LLC and ACGA Board member.

As a reminder, the IRA rollover provision excludes IRA transfers to fund charitable gift annuities.

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Take Action TODAY - IRA Rollover Legislation

Urge Your House Member of Congress to Pass Legislation That Includes a Permanent Extension of the IRA Rollover Provision

We have learned that the House plans to place a standalone bill on the suspension calendar (a fast-track means of passing legislation) that would permanently extend the following three charitable provisions that were contained in the Tax Increase Prevention Act of 2014 (H.R. 5771):

  • the IRA Rollover provision
  • the deduction for gifts of food inventory and
  • the deduction for conservation easement contributions.

In order for this bundle to pass the House, 50-65 Democrats are needed to vote in favor of the bill.

  Time is of the essence as we've heard that a House vote could come as early as today.



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Significant Change in Wisconsin’s Gift Annuity Regulation

WisconsinLegislation that became effective April 18, 2014 (2013 Wisconsin Act 271) eliminates the need for registration with, and annual reporting to, the Office of the Commissioner of Insurance (OCI).  In order to issue gift annuities in the state, a charity needs to have been in existence for 3 years and include specific disclosure language in the agreement, but no longer needs to file anything with the OCI.

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Call to Action: NY Legislation on Gift Annuities

We need your help in contacting NY legislators relating to pending legislation in New York. ACGA has been working for some time to modify NY's gift annuity law relating to reinsurance of gift annuities. Currently if a charity wishes to reinsure a gift annuity, and reduce the liability in its gift annuity reserve fund, it must use a reinsurance treaty, something that is available only from a few insurers and can be costly. The pending legislation would allow a charity to purchase a commercial annuity and count it as reinsurance in offsetting the reserve obligation.

Click here to view a copy of the Assembly bill (A3783). The corresponding bill in the Senate (S3066) has already passed. What we need now is to urge the Assembly to take action on the bill. There is just one month left in the legislative session, so the time to act is now. We are asking you to call or email your Assemblymen in support of this legislation. Democratic Assemblymen are particularly key, since that party controls the Assembly. Contacting the Speaker of the Assembly's office is also critical, since ultimately the Speaker controls the movement of legislation. Speaker Sheldon Silver's office numbers are 212-312-1420 (NYC) and 518-455-3791 (Albany).

This legislation would provide all charities registered in New York with a much easier, cost-effective way to reinsure gift annuities. As a result, an organization would have an additional option for managing risk with, for example, a particularly large gift annuity, or a large concentration from one gift annuity donor within its gift annuity reserve fund.

Thank you for your assistance in moving this effort forward!

Edie Matulka
Chair, ACGA State Regulations Committee