West Virginia Charitable Gift Annuity Compliance Guide for Nonprofits

Charitable gift annuities can be a practical fundraising tool for established nonprofits that want to provide donors with a reliable income stream while supporting a mission-driven cause. In West Virginia, however, these arrangements come with specific legal requirements that charities must understand before issuing their first agreement.

This guide explains the West Virginia rules for charitable gift annuities, including eligibility standards, donor disclosures, notice requirements, penalties for noncompliance, and a practical compliance checklist for nonprofit leaders.

What a charitable gift annuity is

A charitable gift annuity is a transfer of cash or other property from a donor to a charitable organization in exchange for an annuity payable over one or two lives. The amount paid to the donor is valued below the value of the property transferred, and the difference is treated as a charitable contribution for federal tax purposes.

In simple terms, the donor receives a fixed income stream, and the charity receives the remainder of the gift. Because the structure involves both charitable and payment obligations, states regulate how these arrangements are offered.

West Virginia’s legal position on charitable gift annuities

West Virginia law makes an important distinction: a qualified charitable gift annuity is not treated as insurance in the state.

That matters because it removes the arrangement from the ordinary insurance business framework, but it does not remove the charity’s compliance obligations. Instead, the state sets separate rules for who may issue a charitable gift annuity, what the donor must be told, and what notice must be sent to the Insurance Commissioner.

Who can issue a qualified charitable gift annuity in West Virginia

Under West Virginia Code §33-13B-1, a qualified charitable gift annuity must be issued by a charitable organization that meets both of the following conditions on the date of the annuity agreement:

• The organization has at least $300,000 in unrestricted cash, cash equivalents, or publicly traded securities, excluding the assets funding the annuity agreement.
• The organization has been in continuous operation for at least three years, or is a successor or affiliate of an organization that has been in continuous operation for at least three years.

For purposes of the statute, a charitable organization is generally an entity described in Section 501(c)(3) or Section 170(c) of the Internal Revenue Code.

Why this matters

These thresholds are designed to help ensure that only established organizations with a financial cushion issue charitable gift annuities. For a nonprofit, that means the decision to offer gift annuities should be treated as a governance and treasury decision, not just a fundraising tactic.

Before launching a program, leaders should confirm:

• The nonprofit’s tax-exempt status supports the transaction.
• The organization has enough unrestricted assets to meet the statutory minimum.
• The organization has operated continuously for the required period.
• The board understands the long-term payment obligation created by each annuity.

Donor disclosure required in the annuity agreement

West Virginia Code §33-13B-3 requires a written disclosure to the donor in the annuity agreement itself.

The disclosure must appear in a separate paragraph and in a print size no smaller than the rest of the agreement. It must tell the donor that the qualified charitable gift annuity:

• Is not insurance under West Virginia law.
• Is not subject to regulation by the West Virginia Insurance Commissioner.
• Is not protected by the West Virginia Life and Health Insurance Guaranty Association or any other guaranty association created under West Virginia law.

Practical drafting tip

The disclosure should be placed where it is easy to find and should not be hidden in dense contract language. Many nonprofits use a standalone paragraph near the signature block or within the consumer disclosure section of the agreement.

If your organization uses standardized gift annuity documents, the disclosure should be reviewed carefully before the first West Virginia issuance and whenever the agreement template is updated.

Notice to the West Virginia Insurance Commissioner

West Virginia Code §33-13B-4 requires a charitable organization that issues qualified charitable gift annuities to notify the Commissioner in writing.

The notice must be provided by the later of:

• September 30, 2006, or
• The date the organization enters into its first qualified charitable gift annuity agreement.

The notice must:

• Identify the organization.
• Be signed by an officer or director.
• Certify that the organization is a charitable organization.
• Certify that the annuities issued are qualified charitable gift annuities.

The Insurance Commissioner’s instructions also ask for a completed notification form and a copy of the IRS determination letter.

What nonprofits should do before filing

A nonprofit should treat this notice like a formal compliance filing. Before sending it, confirm that:

• The board has approved the gift annuity program.
• The organization has the required financial resources.
• The signer has authority to certify the filing.
• The agreement template includes the required donor disclosure.
• The IRS exemption documentation is readily available.

Penalties for failing to provide notice

West Virginia Code §33-13B-5 states that a person who violates the notice provisions may be fined up to $1,000 per qualified charitable gift annuity agreement, after notice and hearing.

At the same time, the statute includes an important protection: failure to comply with the notice requirements does not automatically prevent an otherwise compliant charitable gift annuity from being treated as qualified.

That is not a reason to ignore the filing. It means the legal status of the annuity and the compliance status of the organization are separate questions. A charity may still face penalties for failing to file even if the annuity itself remains qualified under the statute.

Why West Virginia says the arrangement is not insurance

West Virginia Code §33-13B-2 confirms that issuing a qualified charitable gift annuity is not engaging in the business of insurance in the state.

This is a key concept for nonprofit boards and administrators. A charitable gift annuity is a charitable fundraising instrument with an annuity feature, not an insurance product sold by a carrier. That distinction affects regulation, disclosures, and operational planning.

Unfair trade practices law does not apply

West Virginia Code §33-13B-6 provides that issuing a qualified charitable gift annuity does not violate the state’s unfair or deceptive trade practices provisions.

For nonprofits, this helps clarify that a properly structured charitable gift annuity is recognized as a lawful charitable arrangement rather than a deceptive commercial insurance practice. But it does not eliminate the need for accurate disclosures, careful recordkeeping, and board oversight.

Compliance checklist for nonprofits considering charitable gift annuities

Use the checklist below before offering gift annuities in West Virginia:

• Confirm the organization is a qualifying charitable organization.
• Verify at least three years of continuous operation, or successor or affiliate status.
• Confirm at least $300,000 in unrestricted cash, cash equivalents, or publicly traded securities, excluding assets funding the annuity agreement.
• Review and approve the gift annuity agreement template.
• Add the required West Virginia donor disclosure in a separate paragraph.
• Obtain internal approval for the first issuance.
• Prepare and send the written notice to the Insurance Commissioner.
• Keep a copy of the filing, the IRS letter, and board approvals in the compliance file.
• Track each annuity issued and maintain records for audit and governance purposes.

Common mistakes to avoid

Even experienced nonprofits can run into trouble if they treat charitable gift annuities as a casual fundraising add-on. Common mistakes include:

• Using an agreement that omits the West Virginia disclosure.
• Sending the commissioner notice after the first agreement is already executed.
• Assuming the arrangement is regulated like ordinary insurance.
• Failing to document the organization’s financial eligibility.
• Relying on outdated templates that do not reflect current law.

A small template error can create a compliance issue across every contract the organization issues.

How Zenind can support nonprofit compliance

For nonprofits building a stronger compliance process, Zenind can help you stay organized as you form, maintain, and document the corporate records that support mission work. That includes keeping filings centralized, maintaining essential company details, and building a repeatable workflow for annual compliance.

While charitable gift annuities require their own legal review, having a clean organizational foundation makes it easier to manage board approvals, record retention, and filing discipline.

Final takeaways

West Virginia allows charitable gift annuities, but only within a defined compliance framework. The core requirements are straightforward:

• The charity must qualify financially and organizationally.
• The donor must receive a written disclosure in the agreement.
• The organization must notify the Insurance Commissioner.
• Penalties may apply if notice rules are ignored.

For nonprofits, the best approach is to treat charitable gift annuities as a formal program with documented procedures, not an informal fundraising experiment. When the legal structure is set up correctly, these agreements can support both donor planning and long-term charitable giving.