A charitable gift annuity is a gift made directly to a public charity, in return for which the charity makes fixed payments to one or two annuitants, for their lifetimes under a charitable gift annuity agreement.
The Philanthropy Protection Act of 1995 provides that the solicitation of charitable annuity gifts on behalf of a charity may be made by ONLY two categories of individuals: unpaid volunteers and salaried charity staff. No
other category of individual can solicit a donor for a gift annuity or offer a charitable gift annuity to a prospective donor on behalf of a charity, unless the charity and its staff that offers gift annuities, is registered with the S.E.C. to sell securities. This means that the payment by a charity of a fee or a commission (by whatever label or name) is specifically prohibited by this federal law, which took effect in late 1995, unless both charity and its staff are properly registered to sell securities.
See the Position Paper Statements by the National Committee on Planned Giving (NCPG) and the American Council on Gift Annuities (ACGA) on the payment of commissions by a charity in return for a gift annuity that were taken in December, 1998. They are found at ....
NCPG: www.ncpg.org/cgacomm.html
ACGA: www.acga-web.org/pospaper.html
It is the recommendation of both of the above organizations that charities NOT get involved in...
1) ... paying commissions or fees directly to any solicitor or third party who brings a donor to them for the purpose of making of a gift annuity, or
2) ... agreeing to be the remainder charity for any gift annuity made to a non-profit that pays funds to a third party solicitor for bringing the charity and the donor together for purposes of completing a charitable gift annuity.
This page last updated April 1, 2002.
