As the economy worsens, donors are increasingly interested in making their gifts through annuities, an approach that allows people to donate money or other assets to their favorite causes in exchange for a secure income stream. Now charities that offer gift annuities In New York face new requirements, under recently revised state law.

In essence, the new law requires charities to increase the amount of surplus funds they hold in reserve accounts linked to the annuities. The reserve funds ensure that charities are able to meet their financial obligations to donors.

Currently in New York, the minimum gift-annuity reserve fund is set at 110 percent of the actuarially determined reserves; those are based on the amount of the annuity, interest rates, mortality rates, and other factors. That percentage will now increase to 115 percent over three years, rising by 5 percent annually, beginning this year.

Charities will be affected by the New York law in varying ways, depending on how they currently handle gift annuities. Some will be unaffected, while others will have to make substantial changes. More information and details are available on the American Council of Gift Annuities’ Web site.