TSCU raises $35,000 for schools by offering 0% interest `tax credit' loans

TEMPE, Ariz.-When Tempe Schools Credit Union officials learned that the Arizona Department of Revenue was offering Arizona residents an income tax credit if they would donate $200 to a public school for extracurricular activities, Tempe Schools staff realized that this posed all sorts of possibilities for the credit union to perform a much-needed community service. They decided to offer members $200 loans at 0% interest, if they would use the money to make the donation. That way, members could take advantage of the tax credit, which allowed them to deduct the donation from the amount they would otherwise have paid the state, dollar for dollar. "This was really special to us," said Tempe Schools CU spokeswoman Gloria Baca. "This was really an opportunity for us to give back to our schools and the community at large, and we wanted our teachers to be able to say, `Wow, that's my credit union!'... We were doing something specifically for them, to impact where they work and where their children go to school." In all, 175 members decided to participate, designating a public school of their choice so that checks could be made out to that school. As Tempe Schools CU went forward with this project for the 1999 tax year, staff received calls from three other Arizona CUs where staff wanted to offer it to their members, also. "They heard through their members or their boards that we were doing this. We were the first (CU to do it) that I am aware of," Baca said. "Originally, we were approached by an employee of Tempe District 3 Elementary School. They were looking for ways to increase contributions (for extracurricular activities) over what they had received the year before. They came to us and said, `How can you help us do this?' " "So, we basically had a brainstorming meeting... and that's when we hatched this idea." The CU has received notes of thanks from members and from schools that received the funds, Baca said. While members designated funds to quite a few favorite schools and projects, T-D 3 Elementary School benefited most from the $35,000 raised through this project, receiving $21,000. "We saw this opportunity to partner with our schools and give back to the educational community that is such an integral part of Tempe Schools Credit Union, and ultimately to have a positive impact on the students," noted Jim Simpson, president/CEO at Tempe Schools CU. "We were happy to see some other credit unions follow suit." Members had until Dec. 31 to make the donation of either $200 to a public school (and/or $500 to a private school) to be able to claim the state income tax credit for the 1999 tax year. Members have until May 31 to repay the interest-free loan, Baca said. The donations will provide funding for extracurricular activities such as band, sports and after-school clubs, as well as for a program that helps girls who have become pregnant finish their educations. Tempe Schools Credit Union has about $80 million in assets and serves 18,000 members. -lide@cutimes.com