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#818550 - 09/19/07 08:24 PM Is a United Way donation qualified?
up all night Offline
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Joined: Feb 2007
Posts: 14

Is a United Way donation a qualified CRA investment?

Is there any regulatory guidance on this issues?

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#818611 - 09/19/07 08:50 PM Re: Is a United Way donation qualified? up all night
MB Guy Offline
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Joined: May 2004
Posts: 10,124
Way, way south.
It should be since the UW benefits low and moderate income people. Is it for use within your assessment area?
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#818684 - 09/19/07 09:11 PM Re: Is a United Way donation qualified? MB Guy
Mrs. Rizzo Offline
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Mrs. Rizzo
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Posts: 10,392
Curled up by the fire...
We get a letter from United Way stating that our donation went to programs specifically for low- to moderate-income families/individuals/areas...that way there's no question.
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#818790 - 09/19/07 10:34 PM Re: Is a United Way donation qualified? Mrs. Rizzo
CRAatBOK Offline

Power Poster
Joined: Mar 2004
Posts: 6,172
Further South than I wanna be.
Two exams ago we used United Way for credit and the examiner accepted it. This year we put it in and they were going to throw the whole amount out. I won't go into the conversation we had about accepting it at one exam and not the other.

We had to contact the UW office and get a list of the non-profits that get funding from them and then prove that over 50% of those entities had a CD purpose. What a pain. I think they have long forgotten that this version of CRA is supposed to be less paperwork than the old.
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#818825 - 09/20/07 12:01 AM Re: Is a United Way donation qualified? CRAatBOK
Len S Offline
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Joined: Oct 2004
Posts: 2,133
Connecticut
Whatever community organization to which you contribute, it is necessary to establish that the primary beneficiaries of the program are low or moderate income people or low or moderate-income areas (or distressed, underserved or disaster areas). There are some terrific community organizations doing wonderful things but which don't qualify as "community development" under CRA. Do you remember what qualifies as community development under CRA? Identify the community development purpose and get documentation to substantiate it. If the organization isn't targeting primarily LMI people for its overall programs, make certain your funds are earmarked for a program that is. I've seen too many banks "throw away" money intended to earn recognition under CRA because the bank thought almost any non-profit community group qualified.
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#819038 - 09/20/07 02:00 PM Re: Is a United Way donation qualified? Len S
MB Guy Offline
10K Club
Joined: May 2004
Posts: 10,124
Way, way south.
There is no substitute for documentation from the organization as evidence. I have done a lot of web searching as well and put the support in the file so the examiners' questions are pretty much already answered when they review my donations file.
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#819802 - 09/20/07 09:20 PM Re: Is a United Way donation qualified? MB Guy
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 84,691
Galveston, TX
While I know it is the political things to do - giving to the United Way. The sure fire way is to give directly. In our community the United Way pockets about 10-12% of all donations and only about 40% of the remaining funds go directly to non-profit organizations and the rest now funds "special projects".
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#827515 - 10/02/07 07:12 PM Re: Is a United Way donation qualified? rlcarey
QCL Offline
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QCL
Joined: May 2002
Posts: 6,259
NW IL
No guidance on this issue that I have found.
We recently argued this point to our examiners...

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#827826 - 10/03/07 12:02 PM Re: Is a United Way donation qualified? QCL
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Posts: 21,293
One other thing you can do is put restrictions on your donation re use for benefit of low to moderate income beneficiaries/groups that help low to mod....and then obtain follow up documentation that your requirement was followed. Never just give the money and hope for the best. Put some strings on it. It is a little more work up front but saves a made scramble during an exam as you have everything you need.
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#828222 - 10/03/07 05:38 PM Re: Is a United Way donation qualified? Kathleen O. Blanchard
Milby Offline
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Joined: Apr 2007
Posts: 953
Tejas
Originally Posted By: rlcarey
While I know it is the political things to do - giving to the United Way. The sure fire way is to give directly. In our community the United Way pockets about 10-12% of all donations and only about 40% of the remaining funds go directly to non-profit organizations and the rest now funds "special projects".

Originally Posted By: Kaybee
One other thing you can do is put restrictions on your donation re use for benefit of low to moderate income beneficiaries/groups that help low to mod....and then obtain follow up documentation that your requirement was followed. Never just give the money and hope for the best. Put some strings on it. It is a little more work up front but saves a made scramble during an exam as you have everything you need.

I believe 2 years after 9/11, 50% of the $1,000,000,000 donated immediately after the attack was still sitting in accounts instead going to the intended recipients. The United Way rep has never been able to give a good answer to my questions on that - and I have not given them any money since that day.

All digression aside, the bank has always reported the United Way dollar contributions and volunteer time and has not run into any issues...yet.

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#829741 - 10/05/07 03:47 PM Re: Is a United Way donation qualified? Milby
KeyJoe Offline
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KeyJoe
Joined: Sep 2007
Posts: 33
Bucks County, PA
Less is more!

From one former examiner's viewpoint; I always looked at what is the bank doing that only a bank can. Everybody and anybody can contribute to the UW. If you really want to have an impact and receive credit, give your money directly. The smaller number of Non-Profits that you deal with, less paperwork but better results.
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Joseph J. Englert, CRCM

Former examiner with the OTS with BSA/HMDA/CRA experience.


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#829832 - 10/05/07 05:23 PM Re: Is a United Way donation qualified? KeyJoe
CRAatBOK Offline

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Joined: Mar 2004
Posts: 6,172
Further South than I wanna be.
That examiner probably does not understand the pressure put on banks to be a strong giver to UW as part of the community. I can see not getting CD credit for the donation, but don't expect banks not to be on the list of UW givers.
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Life is not the way it's supposed to be. It's the way it is. The way you cope with it is what makes the difference.

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