A small, but growing number of credit unions are using a tool designed to support a steady stream of charitable giving: Charitable Donation Accounts, which have grown four-fold since the end of 2014.

Pentagon FCU in Tysons, Va. ($22.8 billion in assets, 1.6 million members) opened a Charitable Donations Account in 2016, which has been growing at a 9% annual rate so far. Its balance was $109.4 million in September, making it the largest CDA among federally insured credit unions. The CDA allows PenFed to earn a higher return to generate more money for philanthropic giving.

CDAs were born from a rule the NCUA adopted in December 2013 allowing the hybrids that are both investment vehicles and generators of funds for charitable giving. The accounts must contribute at least 51% of their gains to qualified 501(c)(3)s within at least a five-year period.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Jim DuPlessis

A journalist for decades.