[Congressional Record Volume 141, Number 189 (Wednesday, November 29, 1995)]
[Senate]
[Page S17789]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    CHARITABLE GIVING PROTECTION ACT

 Mr. D'AMATO. Mr. President, I am pleased to be a cosponsor of 
S. 978, the Charitable Giving Protection Act of 1995, introduced by 
Senators Hutchison and Dodd.
  Charitable organizations serve a vital and unique role in meeting the 
needs of the American people. Religious, educational, benevolent, 
fraternal, and other charitable organizations depend on donations to 
fund their operations. Congress must see to it that charitable giving 
is encouraged to ensure that these critical donations continue.
  Charitable gift annuities enable individuals to make a donation to 
charity and receive lifetime interest payments based on the donation's 
return. The SEC has determined that these types of donations do not 
involve an investment strategy and thus are not securities that would 
otherwise have to be registered.
  Recently, however, a lawsuit has put into question whether charitable 
income funds need to be registered under the Federal securities laws. 
The threat of litigation would deter individuals from making this type 
of donation and prevent charitable organizations from raising funds in 
this manner. S. 978 will allow charitable institutions to continue 
raising vital funds through special investments and charitable gift 
annuities--without the threat of litigation.
  The Charitable Giving Protection Act clarifies that the charitable 
income funds are not required to register under the Federal securities 
laws. This legislation would codify the long-standing SEC practice of 
exempting charitable organizations from registration requirements.
  This legislation maintains critical investor protection provisions of 
the Federal securities laws. It does not exclude charitable 
organizations from the antifraud or disclosure provisions of the 
Federal securities laws. These important investor provisions must be 
retained to protect individuals who make the donations to charitable 
organizations.
  This legislation provides the appropriate relief to charities so they 
can raise and manage their money without compromising investor 
protections. The chief watchdog of the securities markets, the SEC, 
also supports the goals of this legislation. During House Commerce 
Committee hearings on a companion bill, the SEC's Director of the 
Division of Investment Management, Barry Barbash, testified: ``the 
Commission believes that the Philanthropy Protection Act provides an 
appropriate level of investor protection while not encumbering 
charitable organizations with the burdens of full compliance with the 
securities laws.''
  I am pleased to be a cosponsor of S. 978. Last night, the House 
companion bills, H.R. 2145, the Philanthropy Protection Act and H.R. 
2525, the Charitable Gift Annuity Antitrust Relief Act of 1995 passed 
by a unanimous vote of the House of Representatives. I urge the Senate 
to act quickly on this important legislation.

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