CU 2.0 Podcast Episode 260 Matthew Butler on Charitable Donation Accounts

cu 2.0 podcast

CDA – three letters but, ask Matthew Butler, and he will tell you this is a potential huge win for credit unions and their communities.,

Butler is the founder of Elite Capital where a chief product offering is the CDA – that’s a charitable donation account and, no, I hadn’t heard of it either.

Just a handful of credit unions currently use a charitable donation account and Butler is here to tell you that’s a costly mistake.

Here’s why: a CDA allows a credit union to make investments in otherwise impermissible vehicles where the kicker is that 51% of returns have to be distributed as charitable donations (that presently means a 501 C 3).  But the credit union can retain the remaining 49% for its own use.

What’s an impermissible investment?  In the show, Butler points particularly to investment-grade corporate bonds.  There are other options too.  

Why don’t more credit unions use CDAs? We talk at some length in the show about that very point.

A lot simply haven’t heard of CDAs.

Also on the show is Fernando Arrue, portfolio manager at Elite Capital.

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