[Congressional Record Volume 141, Number 190 (Thursday, November 30, 1995)]
[Senate]
[Pages S17870-S17871]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE CHARITABLE GIVING PROTECTION ACT

 Mr. DODD. Mr. President, last night the Senate passed the 
Charitable Giving Protection Act, which Senator Hutchison and I 
originally introduced earlier this year. This legislation will help 
charities use contributions effectively and ensure that these vital 
organizations can continue their good work. I commend Senator Hutchison 
for her diligent efforts and thank all of my colleagues for their help 
in passing this legislation in the Senate.
  Every day across this country, charitable organizations help millions 
of Americans. Whether its giving disadvantaged children meals or 
clothing, providing shelter to the homeless, or working to support the 
educational and medical needs of the less fortunate, charities help 
weave a stronger social fabric for our Nation.
  Regrettably, the benevolent endeavors of charities have been 
jeopardized by a lawsuit, Ozee versuse American Council on Gift 
Annuities, currently before a Federal district court in Texas. That 
lawsuit, which has been certified as a class action against almost 
2,000 charities, asks that all money donated to charities through 
charitable gift annuities be returned, along with double that amount in 
damages. I have heard from a broad spectrum of charitable organizations 
in Connecticut and they fear that this lawsuit will undermine their 
work.
  Over the years, charities have used gift annuities as a means of 
making it easier for people to donate money. Generally, these 
transactions work as follows: A person donates money or some other 
asset to a charity and receives a tax deduction. The charity then 
invests the money and makes fixed, periodic payments to the donor. When 
the donor dies, the remainder of the gift goes to the charity. These 
arrangements help both donors and charities, and it was never the 
intent of Congress to unduly restrict their use.
  In order to ensure that the lawsuit does not bankrupt charities and 
to facilitate the work of charities in the future, the Charitable 
Giving Protection Act clarifies Federal law. The legislation provides 
that the activities of charities relating to charitable gift annuities 
do not violate antitrust law. It also codifies certain exemptions that 
the Securities Exchange Commission has recognized for charitable 
organizations that pool and invest donations.
  However, none of these changes would make it easier for charities to 
commit fraud. The legislation would not change the antifraud provisions 
in Federal securities law or affect Federal tax laws relating to fraud. 
People could still bring appropriate lawsuits against 

[[Page S17871]]
cheats or swindlers attempting to disguise themselves as charities, or 
charities acting fraudulently.
  Mr. President, in recent years, charitable organizations have stepped 
forward and filled some of the gaps in the American safety net, gaps 
that will widen if extreme Republican budget cuts are enacted. Although 
charities will not be able to come up with the funds necessary to 
repair the terrible damage these cuts will cause, charities will try to 
help. They always have in times of crisis. The Charitable Giving 
Protection Act will help them in that effort. Once again, I applaud 
Senator Hutchison's hard work on this legislation, and I thank all of 
my Senate colleagues for helping to move it forward 
expeditiously.

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