NCUA Issues Ruling On Charitable Foundations
A federal credit union may form a non-profit 501(C)(3) charitable foundation to support local charitable causes but must meet several conditions, NCUA said in a new legal opinion letter. "Charitable contributions made by FCUs are clearly within their incidental powers because these contributions promote name recognition and goodwill with the FCUs," NCUA said in a letter to Guy Messick, a Philadelphia attorney who is working to set up such a foundation for one of his CU clients.
Among the conditions enunciated by NCUA are that contributions made to the foundation by the credit union are reasonable, given the financial condition of the credit union, and "are in the best interests of the FCU." In addition, the foundation must retain its tax-exempt status; continue a separate corporate existence from the credit union; and avoid conflicts of interests.
Ed Roberts can be reached at eroberts