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Winning hearts and minds

Is community involvement and support a good business decision for credit unions?

Credit unions, by their very nature, are connected to the communities they serve since their primary goal is to boost the financial lives of their members. But how important are community donations in the effort to attract and retain members?

It’s a question that’s been debated over the years in countless meetings, conferences and post-meeting pub sessions. The research and experience of many industry executives says credit unions must realize that, first and foremost, they are in the banking business and doing that well is key to their success. “We are focused on the community and a big part of our strategic plan is having a positive impact on the community,” says Marie Mullally, CEO of Halifax-based CUA, formally Credit Union Atlantic (20,000 members, $460 million in assets). Mullally turns to the key question: do members care that the credit union supports community in concrete ways, thus causing them to choose CUA versus another institution? “That’s a very hard one to measure,” she says. “We ask members questions and what we know is that they care that we care. And they have great pride in knowing that our principles and values are aligned to ensure that the community is vibrant and strong.”

Mullally adds that having an impact on your communities cannot be a substitute for providing an exceptional banking experience and meeting the banking needs of your members. “A caveat: they also tell us, ‘If you don’t do your banking well, I’m going to apologetically leave.'”

Nonetheless, CUA is highly motivated to support community in a myriad of ways. “We strongly believe that the focus on the community and being a community-based banking organization means it’s in our DNA, it’s who we are,” Mullally says. “Our guiding principles and our values are fully integrated in a structured and meaningful approach to community impact.”

The seventh principle

One of the core cooperative principles is concern for community. The Ontario Co-operative Association defines the seventh principle this way: while focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.

Credit unions follow this principle every day across the country in thousands of ways. A quick look at the website, creditunionsarehelpinghere.com, a cooperative program produced by credit unions in British Columbia, Saskatchewan and Ontario, shows donations big and small have added up to more than $53 million since 2012. Examples include $15,000 from Healthcare and Municipal Employees’ Credit Union (12,000 members, $160 million in assets) to the Hamilton Health Service Foundation and $12,180 from G&F Financial Group (31,000 members, $2 billion in assets) to the Mount Pleasant Family Centre Society.

The 2017 Credit Union Community and Economic Report, prepared by the Canadian Credit Union Association (CCUA), shows that in 2016 its 275 members contributed $55.9 million to community or charitable programs.

“We strongly believe that the focus on the community and being a community-based banking organization means it’s in our DNA.” – Marie Mullally

Credit unions vary widely in their focus on values and commuity programs. The credit union awareness study, National Credit Union Awareness & Perceptions, released this past spring by the CCUA, found non-members were neither impressed nor very interested in these efforts. Of non-members, only eight percent said charitable community contributions would be a factor in switching. “It’s better to say that profits go back to customers than profits stay local,” said one survey participant.

Among non-members, the issues of how active their financial institution is in the local community and its charitable community contributions were less of a factor than among credit union members.  But several business case studies show that one definite benefit of strong corporate social responsibility programs is increased employee engagement, an important factor in an industry that has to compete for qualified staff. According to a 2016 Deloitte study on volunteering, millennials were “twice as likely to rate their corporate culture as very positive” if their company participated in workplace volunteer activities, Inc.com reported. “Employees respect companies that care for their community — it simply makes employees feel good and increases the emotional attachment to their employer.”

Meridian Credit Union (322,000 members, $15.6 billion in assets) spends four percent of its pre-tax earnings on its various community programs. “These programs build our brand by making a bold community impact while engaging and empowering our employees, members and future members,” Ontario’s largest credit union stated in its 2017 annual report.

Sarah Rea, director of social commitment at Meridian, says the credit union benchmarks its programs against other large credit unions that make contributions in the same range. Rea notes that the Imagine program, aimed at non-co-op, for-profit businesses, aims to get corporations to donate one percent of their income. Most don’t hit even that meagre level. “Our focus is on engaging, educating and empowering members and employees,” Rea says. One of its core projects is the Good Neighbour program that operates in 90 communities where the credit union operates. (The program is operated by local branch managers who have helped 360 non-profits and charities in their communities.)

Staff encouraged to help

Another element of Meridian’s commitment to communities is an employee program that encourages staff to help local groups. More than 40 percent of the credit union’s 2,000 employees take part. A third is its Sean Jackson Scholarship program, named after its first CEO, who died of cancer. Each year the scholarship awards $10,000 to a high school graduate who demonstrates commitment to community. The first winner created a charity that provides Indigenous children and teens living in remote communities throughout Canada and around the world with books donated by publishers, authors, schools, individuals and organizations.

Meridian also focuses on financial literacy and has worked with Smart Saver on a website that makes it easier to learn about the advantages of a Registered Education Savings Plan (RESP) and how to quickly open an account. “Since 2015, more than 460,000 people have visited the website and 14,000 have started saving with Meridian or another financial institution,” Rea says.

Meridian has also worked with the province and the Ontario Chamber of Commerce to support the Funny Money program in 400 schools across Ontario. It brings comedian James Cunningham into the schools to make it fun for students in Grades 11 and 12 to learn financial literacy.

Susan Byrom, senior manager of community investment at First West Credit Union (240,000 members, $11.9 billion in assets) in British Columbia says its signature cause is battling hunger in the communities where it operates. First West has two programs: Feed the Valley in the areas served by its Valley First and Enderby and District divisions and a sister program, Full Cupboard, that runs in communities served by its Envision and Island Savings divisions.

Byrom says First West set a goal of raising $1 million for the Feed the Valley program over 10 years and topped that mark in 2016, just eight years after it was founded, through its efforts with community partners and its employees. “It’s becoming embedded in our culture and becoming part of everything we do,” Byrom says. “It’s how we operate and part of who we are.”

For example, if First West is refurbishing a location and sells old chairs and furniture to staff, they are asked to make a donation to the local foodbank. First West also has a social vision it calls Lead Well, that focuses on the many skills its employees have and how they can be useful to non-profits and community groups.

“We know that engaging our employees and moving them into the community can help to grow capacity in non-profit organizations,” Byrom says. “Giving that gift of your knowledge to help someone else — to help an organization grow — that’s what Lead Well is about for us. How do we strengthen the communities where we live, work and play?”

Sharing best practices

This past spring, Ben Janzen, the director of values integration at Kindred Credit Union (22,000 members, $1.1 billion in assets) coordinated a 10-week course through CCUA’s Community Impact Committee. It attracted 28 participants who wanted to learn how to improve their community programs and share what they’re doing. “I think that we need to be using the whole design of our credit union towards impacting and improving our communities,” Janzen says. He suggests that credit unions look at their community relationships, their buildings and their facilities. “All of those have to be aligned with our cooperative values.”

Janzen adds that the idea that credit unions helping their communities is a cooperative value but the idea of deploying all of a credit union’s assets, “not just our dollars, is a relatively new thought. We saw in the CCUA awareness study that the values piece wasn’t necessarily going to be the main thing to talk about. I’m not totally sold on that.”

Janzen fears that financial services are going to become automated and if credit unions haven’t stressed values and community impact their relevance is going to fade. Janzen argues that members’ desire to bank with an organization that shares their values is a “piece that actually will move over time and I think that we’re seeing consumer sentiment also shift toward values. “Values are part of who we are. I think it is going to be increasingly relevant,” says Janzen, who will be spreading that message this year at a second, 10-week CCUA course on how credit unions can build community impact.

Rea says that for Meridian, “our social commitment is one of five imperatives in our business strategy. This ensures that it is always top of mind for us as a member-, employee- and community-centric organization.”

Such cumulative experiences show that, for credit unions, community values and business success is an art that must go hand-in-hand. ◊