SAN FRANCISCO (8/10/12)--A new credit union that would serve nonprofit organizations nationwide has cleared its first hurdle with regulators, according to American Nonprofits, a newly formed group that hopes to establish the credit union.
If approved, the proposed credit union, called American Nonprofit FCU, would serve nonprofit employees and their families across the nation. It could start operations as early as the end of 2013, Pamela Davis, the organization's founder and board president, told The Chronicle of Philanthropy (philanthropy.com Aug. 8).
While several professional associations serve nonprofits with specialties such as fundraising, people working for nonprofits have no place to get together to talk about finance and strategy, Jan Masaoka, head of the California Association of Nonprofits, told the Chronicle.
Many nonprofits need greater access to financial services; they are "redlined out of credit" because banks don't understand the nonprofit business model, Masaoka said. The proposed credit union would provide nonprofits and their workers an additional federally insured option for lines of credit, credit cards and working capital, she said.
Davis said that the group received preliminary approval from the National Credit Union Administration (NCUA) to allow organizations and individuals joining American Nonprofits to be eligible to join the credit union.
The group received a $100,000 grant from Nonprofits Insurance Alliance Group in March to hire a staffer to steer the project, and the Wallace Alexander Gerbode Foundation contributed a $25,000 planning grant, said the article.
American Nonprofits plans to survey subscribers of Blue Avocado, an online magazine that Masaoka edits, and more than 11,000 organizations served by Nonprofits' Insurance Alliance of California and the Alliance of Nonprofits for Insurance, which are members of the group forming the credit union. The survey and guidance from NCUA will determine which cities the proposed credit union will focus on first.
Meanwhile, American Nonprofits is raising more funds to start up the credit union. Its goal is $10.5 million in commitments, with at least $500,000 earmarked for the initial operating capital, said the article.