Arizona Laws 20-119. Charitable gift annuities; audited financial statements; disclosure statement; commissions prohibited; definitions
A. On the day a charitable organization enters into an agreement for a charitable gift annuity, the charitable organization shall have:
Terms Used In Arizona Laws 20-119
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- department: means the department of insurance and financial institutions. See Arizona Laws 20-101
- Donor: The person who makes a gift.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Property: includes both real and personal property. See Arizona Laws 1-215
- Writing: includes printing. See Arizona Laws 1-215
1. A minimum of three hundred thousand dollars in unrestricted cash, cash equivalents or publicly traded securities, exclusive of assets funding the charitable gift annuity agreement.
2. Been in continuous operation for at least three years or is a successor or affiliate of a charitable organization that has been in continuous operation for at least three years.
3. Had an annual audit of its operations conducted by an independent certified public accountant for the past two fiscal years.
B. Any person offering a charitable gift annuity in this state shall provide the following information in writing to a prospective donor before entering into an agreement for a charitable gift annuity or receiving any transfer of cash or property from the donor:
1. The name and address of the charitable organization offering the charitable gift annuity to the donor.
2. A description of the charitable organization offering the charitable gift annuity, including its state of organization, its date of organization and its current operations.
3. A statement that the charitable organization will make additional financial information, including its most current audited and interim financial statements, available to the donor on request. This statement shall be conspicuous and printed in at least ten point bold-faced type.
4. A disclosure that the charitable gift annuity is not insurance under the laws of this state, is not subject to regulation by the director and is not protected by any state guaranty fund.
5. A disclosure that this state and the department have not approved or disapproved of the charitable gift annuity being offered and have not determined whether any of the information provided to the donor is truthful or complete.
C. If any agreement between a charitable organization and a donor for a charitable gift annuity is entered in violation of this section, the donor may bring an action in a court of competent jurisdiction to recover the amount of the consideration paid for the charitable gift annuity, with interest, taxable court costs and reasonable attorney fees, less the amount of any income received from ownership of the charitable gift annuity, on tender of the charitable gift annuity or the agreement for it. Any such action shall be brought within two years of the date the donor discovered or reasonably should have discovered that the charitable gift annuity transaction did not comply with this section.
D. In connection with the solicitation or negotiation of a charitable gift annuity, a person shall not directly or indirectly pay or accept a commission, fee or other form of compensation contingent on the donation or amount of the charitable gift annuity. This subsection does not prohibit or restrict a charitable organization from paying the regular compensation owed to its employees or the distribution of monies for authorized charitable purposes.
E. For the purposes of this section:
1. "Charitable gift annuity" means a transfer of cash or other property by a donor to a charitable organization in return for an annuity that is payable over one or two lives under which the actuarial value of the annuity is less than the value of the cash or other property transferred and the difference in value is a charitable deduction for federal tax purposes.
2. "Charitable organization" means an entity that is described in section 501(c)(3) or 170(c) of the internal revenue code of 1986.