In what has become the most ambitious education endowment ever for credit unions, North Carolina State Employees CU said it plans to provide college scholarships to every one of the state's 330 high schools through its newly formed SECU Foundation.
The plan will require more than $3 million a year to fund the scholarships at state-run institutions. Each of the $10,000 grants will pay for four years of tuition at one of the state's schools, according to Jim Blaine, president of the $12-billion credit union. "That's a free-ride for a high school senior," said Blaine.
In addition, the new foundation will also provide funding for two $5,000-a-year two-year scholarships at every one of the 58 schools in the North Carolina Community College System, a total of $580,000 a year dedicated to the nation's third largest community college system.
While several credit unions have created their own non-profit foundations over the past year, most are funding them through direct donations from the credit union or from charitable donors. But the SECU Foundation has a different plan.
SECU expects to raise more than enough money for the new non-profit foundation by allowing members to voluntarily divert the $1 a month checking fee charged by the credit union-a total of $6 million a year-to the new foundation. Members will be asked each month to check off a box to approve the diversion of their fee, said Blaine, who expects the vast majority of members to send their money to the foundation.
Even if only half of members were to agree to the voluntary diversion of their monthly fees it would create the best-endowed foundation of any credit union institution, including the National CU Foundation.
"We thought this was a good way to promote awareness of the cooperative structure of the credit union. The members have the choice on where that money goes," said Blaine. "At the same time, we're helping to educate the future leaders of the state of North Carolina."
The scholarships will be awarded based on financial need, academic achievement, community involvement, and other standards. But the winners of will be selected by local boards, not the credit union of the foundation. "(Local boards) will determine where the money goes," he said.
The SECU Foundation was approved by the IRS in July as a 501c (3) charitable organization promoting local community development primarily through educational, health and human services projects.
