I have a situation that I'm curious to see if anyone else has been in before.
A town in our AA recently was awarded a grant from the state from CDBG funds. It was a revitalization grant. Now the town's Main Street organization (it's worth noting that in order to receive the grant from the state, the awarded town had to have an active Main Street organization) wants to raise more funds for other projects for the town. The grant funds and subsequent funds raise from Main Street will be used to reface buildings, repair roads and sidewalks, replace light fixtures, etc. Here is the kicker; the town is located in a poverty distressed middle income census tract.
The Main Street organization has come to the bank requesting funds for their projects. I am trying to determine if the bank could receive CRA credit for this kind of donation. There is no SPECIFIC purpose of the funds to be used for low- to moderate-income people. The only justifications are; (1) the grant was awarded by the state through use of CDBG funds from HUD, (2) the town is located in a poverty distressed middle income census tract. The other issue I am having trouble working through is that the main street organization is a separate entity from the town that received the grant, though they want to use the awarding of the grant as incentive to raise more funds for the town's various projects.
Wow, that was a lot.... I am just curious if anyone has any thoughts on the qualification of this kind of donation. Has anyone submitted something similar and received a positive response from the regulators? FYI, we are FRB regulated.
Thank you so much for any input you all have!!