[Congressional Record Volume 160, Number 127 (Monday, September 8, 2014)]
[Extensions of Remarks]
[Page E1346]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 IN HONOR OF THE 25TH ANNIVERSARY OF THE NONPROFITS INSURANCE ALLIANCE 
                          OF CALIFORNIA (NIAC)

                                 ______
                                 

                             HON. SAM FARR

                             of california

                    in the house of representatives

                       Monday, September 8, 2014

  Mr. FARR. Mr. Speaker, I rise today to recognize the 25th anniversary 
of the Nonprofits Insurance Alliance of California (NIAC), a remarkable 
organization that provides essential risk-management services to enable 
nonprofit organizations to meet the needs of our citizens and 
contribute to our economy.
   NIAC was conceived by Pamela Davis in her Master's thesis at UC 
Berkeley Graduate School of Public Policy in 1987. Despite no insurance 
background, she recognized the growing inability of nonprofit 
organizations to obtain necessary insurance coverage from commercial 
insurers. This, in turn, limited nonprofits' ability to fulfill their 
missions of service to our communities. During the mid-1980s, many 
insurance companies dropped coverage for nonprofits when, at the same 
time, evidence of insurance was required as a condition of providing 
government funded services to communities. As a result, nonprofits lost 
funding and were unable to offer many essential services to children, 
seniors, and our most fragile citizens because the insurance industry 
believed that the risk posed by these operations was too great.
   Ms. Davis challenged insurance companies to produce data that would 
demonstrate the riskiness of nonprofit operations. When no such 
information was forthcoming, she concluded that the risk of nonprofits 
had not been properly evaluated. Looking ahead, she proposed that the 
nonprofit sector could better serve its own insurance needs by pooling 
together and creating their own insurance companies--essentially self-
insuring each other.
   The Davis thesis led directly to the formation of NIAC. It was 
published by the California Community Foundation and widely distributed 
as a possible solution to a difficult problem. With California 
Association of Nonprofits serving as fiscal agent, Ms. Davis spent two 
years raising funds and putting together all of the required 
infrastructure for NIAC. On November 1, 1989, with loans of $1.3 
million from foundations including Ford and Packard, NIAC's charitable 
risk pool welcomed its first member-insured.
   Now, 25 years later, NIAC insures 8,500 nonprofits in California and 
holds an A (Excellent) rating from AM Best. It has demonstrated not 
only that nonprofits are eminently insurable, but also that the 
insurance prices that were being charged during the mid-1980s were too 
high. NIAC successfully reduced prices over its 25 years and returned 
$31 million in dividends to its 501(c)(3) nonprofits because of better 
than expected claims experience. Those nonprofits have, in turn, been 
able to use those funds to bring more services to their communities.
   Congress, in consideration of the public benefits provided by the 
nonprofit sector, passed legislation in 1996 to grant organizations 
like NIAC 501(c)(3) tax-exempt status. By this legislation, Congress 
recognized the value of keeping funds at work in the nonprofit 
community.
   Heeding the call in the late 1990s to assist nonprofits outside of 
California, NIAC was instrumental in creating the Alliance of 
Nonprofits, Risk Retention Group (ANI). ANI's formation in 2000 was 
enabled with grants of $10 million from the Gates and Packard 
foundations. The company now insures nearly 5,000 nonprofits in 30 
states for all types of liability insurance, just as NIAC has done in 
California.
   In her thesis, Ms. Davis had proposed that if more resources could 
be allocated to providing training and risk management assistance, 
fewer accidents would occur and less money would be needed to pay for 
claims and litigation. From their inceptions, NIAC and ANI have 
provided free services to help nonprofits avoid injury and accidents to 
their clients and members of the public. They provide free driver 
training, webinars, in-person consultations and many, many other 
services to help nonprofits do their work more efficiently and safely. 
These programs have demonstrated the success of that idea.
   Mr. Speaker, I have supported NIAC's efforts through its history and 
have watched the Nonprofits Insurance Alliance Group grow in its 
ability to serve our vital and vibrant nonprofit sector. Too often we 
fail to acknowledge the work of people and organizations who are 
dedicated to serving our community needs and making our neighborhoods a 
more livable and tolerant place for all of us. Today, I would like to 
recognize NIAC and its dedicated employees and volunteer board members 
for their work to help strengthen an important part of our economy--
nonprofit organizations.

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