I'm lucky to be able to connect with so many credit union people across North America and sometimes visit sister credit unions to see what they're doing. And lately something has struck me as a trend. Credit unions give away a tremendous amount of philanthropic dollars for community benefit, and it seems to me the vast majority of these donations are given without any strategic thinking or expectation of results.
Moving to reciprocity
Credit unions are member-driven sources of community capital, and their mission drives virtually all of them to give back generously to their local communities. And philanthropy is good. But reciprocity is far better. If I give you a dollar because you need it, it inadvertently sets up a power dynamic between us, the giver and the receiver. It is better than not giving at all, but pure philanthropy often doesn't cure societal ills – it only masks them.
If, instead of looking at these community contributions as donations, we look at them as strategic investments where we expect a return, it will change the whole dynamic. We likely don't expect a financial return, but if we have strategies in place for our organizations, then we should expect the donations we give to further those strategies and our mission. As member-owned organizations, what are the greatest needs facing our members? As custodians of local economies where our members live and work, what are the places where extra capital injected into our communities can have the greatest impact? Create the most jobs? Lift the most people out of poverty? Teach the most people to better manage their finances? Help the most people to access affordable housing? Make our communities more sustainable.
The elusive credit union brand
Let's look at another issue facing credit unions. Our brand is weak, and people don't know the difference between credit unions and banks. I have heard a lot of talk lately about the need for an American national credit union brand. But it also strikes me that many credit unions have neglected to create a strong reason for being other than their own self-perpetuation. What is the brand of a credit union? What in our collective mission is relevant today? Jumping straight to a national brand, though attractive on a certain level, doesn't strike me as being a very sound strategy for growth.
Instead, if we sharpen our mission, evolve it to a new kind of relevance focused on what our communities need, and align our philanthropic dollars as community investment programs designed to achieve an end goal in our members's communities, we will have far greater gains.
Draw on your legacy
What is the history and culture of your credit union? Do you have a segment you serve exclusively? If so, align your giving programs to achieve goals for that community group. Do you come from a specific segment but are now open to all? What in your heritage can drive strategic philanthropy?
You were once a teacher's credit union, so focus on funding childhood financial literacy and programs designed to help keep kids growing up in poverty in school so they can contribute to society in greater numbers. Come from a health care segment? Focus your giving on local health care organizations that can use your support. Create goals around what you want your money to do, just like you do with your operational dollars. Apply similar methodology and metrics, and track the results.
The need to do so has never been greater. For us as a credit union movement, and for the people struggling in our communities today.
It's all about partnerships
Partner with organizations that perhaps others are overlooking where your cooperation and support can make a huge impact and your story will take on a greater local relevance.
If people start seeing similar projects and initiatives out in their community that your credit union helped support and even drive forward, they will have a clearer link back to what doing business with you versus the bank down the street can enable. I believe this is a critical differentiating feature of a credit union and can build brand awareness, understanding of cooperative values, new partnerships and opportunities, and ultimately growth.
What can you stop doing?
One of the toughest parts of my job at Vancity is not simply saying yes to amazing community opportunities and no to opportunities that aren't so great. The toughest thing is looking hard at opportunities that best meet our strategic goals in community, and saying yes to those that best align and, unfortunately, saying no to amazing opportunities that aren't right for us.
What are the opportunities you need to start saying no to, to align yourself to goals that you can measure and where you can make the greatest impact?
An approach like this can have another benefit back to your organization. By listening to the needs of your members beyond what kind of savings account they need, you will move your brand away from the transactional and to something much more vital and relevant. You can move away from being a commoditized service and achieve a more emotional connection to the people you serve. The people, after all, who own you.
William Azaroff is Director of Business & Community Development at Vancity in Vancouver. He leads a team focused on developing new opportunities for Vancity that increase members’s well-being and create positive impact by investing in communities. He does a little dance and then he drinks a little water.