NCUF Seeking Innovation Grant Applications Despite Lower Interest Income

WASHINGTON — Even though ongoing low interest rates have hurt its income, the National Credit Union Foundation has called for applications for this year's Innovation Grants.

NCUF renamed its traditional grant program the Innovation Grants to tie it more closely to its ongoing REAL Solutions effort and after it stopped making grant awards several times in favor of once per year. REAL Solutions is a cooperative effort between the foundation and state credit union leagues to both foster innovative ideas of how credit unions can better serve lower income communities and to assist the in tailoring those ideas to their own particular situation.

Executive Director Steve Delfin explained that it made sense to tie the grant program to the REAL Solutions effort since credit unions themselves are often the best incubators of good ideas. NCUF specifically said it was interested in grants addressing financial education, transaction services, savings, credit and homeownership.

In practical terms, those grant efforts have often meant supporting credit union participation in education program such as BizKid$, efforts to provide check cashing, money orders or tax preparation services, savings awareness programs or individual development account programs, payday loan alternative programs and home ownership counseling.

The grants can seem a challenging goal for some credit unions to reach. The most successful applications will be those where the program will have plans for how to leverage support from other organizations, partner with other organizations, include ideas on how to build membership in low income markets, plans for how to sustain the programming without further Foundation support and demonstrate potential for other credit unions to replicate them.

Delfin acknowledged that the grant requirements can seem daunting, but he stressed that foundation staff will help credit unions work toward the application goals.

“We won't be able to walk them through every aspect of their program, but we will be glad to help them identify possible ideas and strategies which they could use to create a strong program and application,” Delfin said.

Participating credit unions invest in a special account at a participating corporate credit union. The corporate credit union reinvests those funds into a designated account at U.S. Central Corporate Credit Union, designed specifically for the CIF. A portion of the dividend is paid monthly to the National Credit Union Foundation to support state and national development initiatives. NCUF splits their dividends with the state foundation or league based on a pro rata share.

This arrangement works well for the foundation, but does open it to lower income when interest available on CIF investments fall. Delfin said the foundation has enough money to make grants currently but may have to reevaluate the situation should the Federal Reserve cut interest rates much further.

Delfin also acknowledged that the NCUF's Central Investment Fund has been suffering under the current low interest regime. “While it's true that low interest rates have hurt our income, we do have reserves and we're looking forward to reviewing grant applications,” Delfin said.

Complete grant applications need to be in by June 30 of this year, NCUF said.

–dmorrison@cutimes.com