Rule 80-2-4-.06 - Charitable Donation AccountsCredit unions are authorized to invest in charitable donation accounts subject to the following limitations:
(1) The primary purpose of the charitable donation account must be to generate funds to donate to 501(c)(3) and 501(c)(19) non-profit organizations that serve a charitable, social, welfare, or educational purpose and serves the credit union's field of membership;(2) Prior to investing in a charitable donation account, the Board of Directors must adopt a Conflict of Interest and Ethics Policy that specifically addresses charitable contributions. Such Conflict of Interest and Ethics Policy must include all designated charitable purposes authorized to receive contributions and each designated charitable purpose must be consistent with the best interests of the membership of the credit union. The credit union shall develop written procedures regarding the funding of charitable donation accounts and the distribution of funds from such accounts;(3) The terms and conditions controlling the charitable donation account must be documented in a written agreement. At a minimum, the written agreement must provide that donations will only be made to authorized organizations, document the investment strategies and risk tolerances that must be followed in administering the account, provide that all records of the account, including distributions and liquidation, will be maintained in conformity with generally accepted accounting principles, and provide for the frequency of distributions to authorized organizations;(4) The charitable donation account may purchase an investment that would otherwise be impermissible if purchased by the credit union so long as the type of investment is authorized by the written agreement;(5) Prior to the charitable donation account investing in an otherwise impermissible investment under Paragraph (4), the credit union must develop policies and procedures, approved by the Board of Directors, detailing the risk management processes that will be utilized prior to investing in an otherwise impermissible investment, including, but not limited to, the controls that will be implemented to monitor the investment, the timing and methodology of evaluating the quality and risks posed by the investment, and a documented and reasonable approach to transfer or otherwise divest of the investment in an expedited manner;(6) The aggregate investment in charitable donation accounts cannot exceed five (5) percent of the credit union's net worth;(7) A credit union cannot contribute funds to a charitable donation account if it has negative earnings unless it has received prior written approval from the department;(8) A minimum of 51 percent of the total return from each charitable donation account must be distributed to one or more authorized organizations;(9) Distributions must be made to authorized organizations no less frequently than every five (5) years;(10) Assets of charitable donation accounts must be held in segregated custodial accounts or special purpose entities specifically identified as charitable donation accounts. If a credit union structures the charitable donation account as a trust, such trust must be a revocable trust and the trustee must be an entity regulated by a state or federal regulatory agency;(11) Upon termination of the charitable donation account and subject to compliance with Paragraph 8, the credit union may receive a distribution of the remaining assets in cash or, alternatively, in kind so long as those assets are permissible investments for state-chartered credit unions; and(12) Such investment must be consistent with principles of safety and soundness.Ga. Comp. R. & Regs. R. 80-2-4-.06
O.C.G.A. §§ 7-1-61, 7-1-663.
Original Rule entitled "Charitable Donation Accounts" adopted. F. June 27, 2018; eff. July 17, 2018.Amended: F. July 12, 2024; eff. Aug. 1, 2024.