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.

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Jim DuPlessis

A journalist for decades.