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Suggested Maximum Gift Annuity Rates, Quality Training Opportunities, and Consumer Protection Advocacy

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ACGA State Regulations Committee Update

CoxThe ACGA State Regulations Committee strives to work collaboratively with ACGA members and with state regulators throughout the United States to track potential changes in regulations as well as to provide input on questions regarding state regulations. To that end, the Committee has been working toward a suggested Investment Policy Statement to provide ACGA members.

As a helpful guide, the Committee will soon provide a Suggested Investment Policy Statement (SIPS) to ACGA members. The SIPS document presents several best practices for the staff and board members charged with the oversight of charitable gift annuities and covers areas and designation of certain responsibilities, investment management, potential conflict of interests, asset allocation, spending polices and sample board reports.

This effort came out of communication with ACGA members and direct conversations with certain state regulators. Through these communications it became clear that in some cases boards responsible for an entity issuing CGAs were not being regularly or properly informed as often or in enough detail as desired by certain regulators. Additionally, these regulators were seeing assets allocations that were over simplified. For example, an investment in one mutual fund or one exchange traded fund did not meet a minimum standard for the regulators definition of diversification. Additionally, since the great financial crisis of 2008-2009 exposed areas of securities lending and some investment derivatives, certain regulators want to ensure that boards are aware of potential risk, outside of market risk, in investment vehicles such as mutual funds, exchange traded funds or other commingled vehicles.

The Committee continues to monitor current suggested changes that are being reviewed by highly regulated states. We plan to work with the regulators and the ACGA membership to assist in the communication of the changes and again look to provide suggested best practices. We look forward to sharing this SIPS resource with our ACGA members very soon and always welcome questions or insight from you to make sure that we continue to promote responsible philanthropy.