- Restricted agent registration of organization’s
salesmen is required. Issuer should
submit a FORM
U-4 / INSTRUCTIONS
and a $60 registration fee for those
individuals who are to solicit funds on behalf of the organization.Restricted agent registration should be
- Provide a complete copy of the organization’s articles
of incorporation demonstrating its nonprofit status.
- Provide copies of all relevant advertising.
- There should be a separate accounting for the
charitable gift annuities.
- Describe the organizational structure of the issuer,
including how the members of its Board of Directors or other legal governing
body are chosen or replaced.
- Identify all directors, trustees, and executive
officers or persons having similar authority of the issuer.
- Disclose if any director, trustee, or officer of the
issuer, has, during the past ten years, been convicted of any criminal
proceeding (other than for traffic violations or other minor misdemeanors), is
the subject of any pending criminal proceedings, or was the subject of any
order, judgment or decree of any court enjoining such person from any
activities associated with the offer or sale of securities.
- The annuities shall be sold to a limited class of
investors. The issuer should define a
limited class of investors that is consistent with its operations and is
compatible with the structure and organization of the foundation.
- Provide a Consent to Service of Process, FORM U-2
appointing the Secretary of State to
accept service of process.
- Provide a detailed explanation as to the calculations
of the annuity payments.
- Issuer should provide a copy of the disclosure
statement to be signed by donor.
Disclosure statement should contain
at a minimum, but not limited to:
- All relevant risks;
- The annuities are nonassignable;
- Donor’s tax consequences;
- A description of any other related material financial
information of the issuer’s financial activities and operations that relate to
its ability to pay annuity payments;
- The following disclaimer: The payments made under a charitable gift
annuity are backed by the full faith and credit of the organization and are not
issued, insured or guaranteed by an insurance company or backed in any way by
the State of Alabama;
- All present, pending or threatened material legal
proceedings, including those that are known to be contemplated by governmental
authorities, administrative bodies, or other persons to which the issuer or its
property is or may become a party;
- Charitable gift annuities payout less than commercial
- Donor should consult with accountant and/or legal
advisor before establishing charitable gift annuity.
- Describe the method and manner in which the annuities
are being sold including methods of solicitation and subscription.
- Provide a copy of any script that may be utilized
during personal consultations with potential donors.
- Issuer should maintain a segregated account for its
charitable gift annuities. The assets of
the account should not be liable for any debts of the organization other than
those incurred pursuant to the issuance of the charitable gift annuities. The general assets of the organization should
be liable for annuity agreements to the extent that the segregated account is
- Provide a draft of the offering circular or brochure to
be used in connection with the charitable gift annuities.
- Provide the name and address of the custodian and the
manager of the assets to be contributed.
- Provide a copy of the annuity agreement to be signed by
donor and a representative of the charitable organization.
Annuity agreement should contain:
- The value of the property or securities to be
transferred to the charitable organization;
- The amount of the annuity to be paid to the donor or
other annuitant (annual amount);
- The manner in which and the intervals at which payment
is to be made;
- The date of birth and gender of the person or persons
during whose life payment is to be made;
- The name and address of annuitant; and
- The date that payments are to begin.
- The issuer’s audited financials should be provided that
consist of: Statements of assets and liabilities (balance sheet) for its three
most recent fiscal years; Statement of revenues and expenses (income statement)
for its three most recent fiscal years; Statement of cash flows for its three
most recent fiscal years; A description of any recent changes in its current
accounting policies; A copy of the report of the independent certified public
accountant shall precede the financial statements; Also, provide financial
statements for the most recent quarter along with an attestation. Financial statements should be submitted to
the Commission annually.
- Provide a copy of investment parameters to be
implemented for all contributed assets.
- Material changes to program should be submitted to the
Commission prior to implementation.