House panel backs bill to speed and standardize transfer of legacy gifts to nonprofits

Senate Bill 118 drew broad support from nonprofit leaders, university gift‑planning directors and financial‑sector stakeholders at a House Finance Committee hearing. Sponsor testimony said the bill addresses inconsistent practices by custodians and financial institutions that delay transfers to charities and sometimes force nonprofits to open institutional accounts or provide personal data for staff.

John Krause, executive director of gift planning at the University of Denver, described recurring stories in which charities faced burdensome procedures to claim gifts that donors had already designated. "In the absence of these actions at the federal level or by the companies themselves, this bill is necessary to protect Colorado charities," Krause said.

Other witnesses from the University of Colorado, Colorado Public Radio, Jewish Family Service, and the Colorado Nonprofit Association detailed examples of long delays and large administrative costs when custodians required nonprofits to become customers or provide sensitive personal information. Several bank and credit‑union witnesses told the committee they had participated in a robust stakeholder process and supported the bill because it would standardize transfer timelines and verification methods.

Why it matters: Proponents said timely transfers enable nonprofits to put donor funds to work on scholarships, services and programs and reduce administrative burden on organizations that often operate with small staffs. Witnesses described examples in which transfers took months and required opening accounts or providing multiple staff Social Security numbers.

Action and next step: Following testimony from both nonprofit and banking representatives, the committee moved SB 118 to the Committee of the Whole with a favorable recommendation (recorded vote: 9 yes, 1 no, 1 excused).