Charities Fight Financial Firms Blocking Deceased Donors' Gifts

Nonprofit organizations across the United States are pushing back against a growing practice by financial institutions that they say is delaying or obstructing the release of charitable gifts left by deceased donors. At issue are new policies requiring charities to hand over personal information about their own employees before banks and brokerages will transfer bequeathed funds — a demand nonprofits argue is unnecessary and invasive.

The friction is creating real-world consequences for charities that rely on bequests as a significant source of operating revenue. When financial firms hold up these transfers, organizations can face cash-flow disruptions, delayed programs, and mounting administrative costs as staff work to satisfy information requests that vary from institution to institution.

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Nonprofits contend that the financial industry's information-collection policies go beyond what is legally required and amount to an overreach that places an undue burden on the charitable sector. The organizations argue that they are the legitimate, court-recognized beneficiaries of these estates and should not have to submit employee data simply to receive funds that donors specifically designated for them.

The standoff highlights a broader tension between financial institutions' compliance-driven due-diligence requirements — often rooted in anti-money-laundering and know-your-customer frameworks — and the operational realities faced by mission-driven organizations with limited legal and administrative resources. Smaller nonprofits, in particular, may lack the staff capacity to navigate prolonged disputes with large financial firms.

As the charitable sector amplifies its concerns, pressure is mounting on regulators and lawmakers to clarify what information financial institutions can legitimately demand from nonprofit beneficiaries. Continue reading at US Top News and Analysis.