We give at the office
By christina p. o’neill
When banks and other financial institutions give, they want to make a difference in their communities as well as raise their local civic profiles. Dollars aren’t the only measure of a philanthropic effort, they indicate - putting in the time and brainpower to make things work is also crucial.
"We look at it as a total commitment to the marketplace, not just writing checks," says John Merrill, market president, commercial banking-Massachusetts for Sovereign Bank. Sovereign encourages its employees to volunteer, and allows them to do so on bank time. "The better our community is, the better our local bank franchise will be," he says. Many others echo his sentiments.An increasing trend in bank and credit union philanthropy is designing an issue-specific program and taking an active role in implementing it. The focus is often on things that improve the local market economy, such as affordable housing, financial literacy, children’s services, and, in a unique case, mental health.
One of the highest-profile endeavors is the Citizens Financial Group focus on affordable housing, workforce development and English as a Second Language. Its Citizens Housing Bank has staked $200 million throughout New England to develop affordable housing with the goal of generating 1,200 units in the six New England states. Last year, Citizens donated $6.1 million to more than 1,200 organizations in Massachusetts alone. Citizens teamed with the state Treasurer’s office to launch a $25-million, below-market rate loan pool for low- to moderate-income Massachusetts neighborhoods.
Bank of America’s priority on funding the arts comes directly from the bank and from the many trusts it manages. The Worcester Art Museum, ArtsWorcester, and the Worcester Foothills Theater have a place on BoA’s lengthy list of Massachusetts non-profits it has supported, cheek by jowl with Accion USA, Worcester Community Housing Resources, the YWCA of Central Massachusetts, and the Martin Luther King Business Empowerment Center.
Fitchburg-based Fidelity Bank is in its second year of advocacy for mental health services and research. It has raised $135,000 for its efforts during that time. Fidelity CEO Ed Manzi says the bank wanted to fulfill an unmet need that does not currently have significant corporate backing. A bank-initiated program has already trained six "support workers" who target the families of teenagers having mental-health crises. When it’s fully launched, the endeavor will fund research for diagnosis, raise awareness and seek to eliminate the stigma attached to mental illness.
TD Banknorth concentrates on financial literacy training, promotion and development of affordable housing and job-training programs. It promotes programs to develop local economies through small-business support and community revitalization efforts. It also supports organizations in which its employees are involved.
Leominster Credit Union has also developed an issue-specific program focusing on teaching financial literacy to young people. Employees visit area schools most days of the school week to teach children about checking accounts, savings accounts and loans. LCU offers checking accounts for children younger than 18 with a parent co-signer.
While they support their local chapters of the United Way, the majority of the financial institutions we spoke to say that they choose their own causes. Many institutions - and not just the largest ones - have established separate foundations that make annual grants to organizations chosen by the foundation’s board of directors or by upper management.
Webster Five Cent Savings Bank is an example. It sets its charitable giving course through a separate foundation, with its own board of directors, which meets four times a year. Its grant money must be spent to support individuals who live in the markets it serves. Separately, every branch office has its own budget for local donations, and the branch manager decides how to use it.
Management both encourages employees to volunteer during business hours and supports causes in which they are involved. Flagship Bank is a particular example. The bank chooses organizations to support based on involvement by a Flagship employee. As do most other financial institutions, Flagship pays its employees for volunteer hours during business time but does not count those hours as part of any donation it makes. Neither does Southbridge Credit Union. SCU CEO Thomas Smalarz says the organization sets no cap on volunteer hours. "We just use good judgment," he says.
While banks and credit unions are forthcoming about their philanthropic missions and application procedures, some decline to disclose how much they give. Others note that the dollar volume of what they give should be measured not by total assets, which accumulated over years, but as a percent of pretax income in which the gifts are given. One to 2 percent of pretax income is a standard benchmark, but some institutions may go to 3 percent and more. Laurance Morrison, spokesman for Southbridge Credit Union, which made $25,000 in charitable donations in 2005, also adds that expenditures per capita in an institution’s marketing area should be considered - in that case, smaller institutions’ donations may be higher for the populations they serve. By that yardstick, SCU contributed $1.42 per capita in its 35,500-person marketplace.
Do banks and credit unions give enough? Bank of America chair and CEO Ken Lewis says the answer isn’t in dollars alone. In a Feb. 26 op-ed piece in The Boston Globe, he encouraged business leaders to take risks in the type of support they provide, and to demand results. It’s not how much your institution gives, he said - it’s how well you engage in community partnerships to deliver meaningful and sustainable results.
Christina P. O’Neill can be reached at coneill@wbjournal.com
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