Nonprofits Push Back on Financial Firms Holding Charitable Bequests
Charities say banks and brokerages are demanding personal staff data before releasing gifts from deceased donors, delaying critical funding.
Nonprofit organizations are mounting opposition to policies at financial institutions that require charities to submit personal information about their employees before releasing gifts left by deceased donors, a practice groups say is creating significant delays in the transfer of charitable bequests.
The friction points to a growing tension between financial firms' compliance procedures — often tied to anti-money-laundering and know-your-customer regulations — and the operational realities of charitable organizations that depend on timely access to donated funds. Charities argue the requirements are burdensome and go beyond what is legally necessary to process estate gifts.
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The delays affect a critical fundraising channel. Bequests from deceased donors represent a substantial portion of planned giving for many nonprofits, and holdups in receiving those assets can disrupt budgeting cycles and program delivery for organizations already operating on tight margins.
Financial institutions, for their part, have broad latitude in determining what documentation they require before releasing assets to third-party beneficiaries. Nonprofits contend that demands for detailed personal data on charity staff members are an overreach that introduces unnecessary barriers into a process that should be straightforward once legal documentation of the bequest is in order.
The dispute underscores a broader challenge facing the charitable sector as it navigates an increasingly compliance-heavy financial environment. Advocacy groups representing nonprofits are calling on regulators and financial institutions to establish clearer, more uniform standards for processing charitable bequests. Continue reading at US Top News and Analysis.
