Is Your Financial Institution Picking The Right Charitable Partner?

Banks and credit unions often take a willy-nilly approach to choosing the charities they will support. Many just follow the herd and stick with safe choices like Boys & Girls Clubs of America and United Way. Some support organizations like the Girl Scouts simply because the CEO's daughter is involved. Others give to whomever comes knocking first. But charitable giving can — and should — play a significant and strategic role in how consumers perceive your financial institution's brand.

Regardless of size, all retail financial institutions want to be viewed as a force for positive change within the communities they serve. One of the best ways to demonstrate that commitment is by establishing relationships with a charitable organizations.

From a purely financial standpoint, there are tax benefits from investing in charities, but more importantly, charitable support is a proven way to enhance brand value and strengthen relationships with both customers and the broader community. When it comes to account acquisition, consumers have shown time and again their preference to choose banking providers with ideals that seem to align with their own.

But the selection of a charitable partner is a decision not to be taken lightly. Just ask any business that finds itself drawn into a scandal when a charitable organization is found to be operating unethically or illegally. Just as bankers and their boards of directors carefully vet strategic partners and other providers, the same level of care and due diligence should be applied to charitable organizations.

Fortunately, there are some proven steps that financial institutions can take to help ensure that any relationship with a charity benefits both parties.

1. Avoid the appearance of nepotism. Your financial institution’s president (or his or her spouse) might also sit on the board of a local charity — say, for instance, a children’s hospital — which may seem like a natural choice for a charitable cause to support. If however, any improprieties were discovered within the hospital’s charitable arm, this would present an immediate crisis for the financial institution and its executives. In this example, the bank should take extra care with its due diligence, examining the children’s hospital’s management, financials and verification of exactly how and where any money is spent.

2. Look for common interests. It would make sense for “Dolphin Bank” to support a dolphin rescue or sea life protection organization based purely on its name and existing branding. Look for natural links to organizations whose own name and brand align neatly with your brand’s messaging. But what if your name is something more generic, like “First Federal?” — not very helpful. But most financial institutions have a mission statement defining how they should be run and their overall vision — their raison d’etre. Leverage this to help influence your choice of charitable organization. If, for example, your institution is committed to hiring and serving military families, then let that translate into support for a charitable organization that serves that same group.

3. Give consumers and employees a voice. A great way to connect your charitable initiatives with consumers is to engage them in helping choose where donations will be made. This approach gives you an excellent opportunity to interact with people around a topic that doesn’t smack of sales and marketing. Having consumers nominate and vote on potential charities gives them a stake in your financial institution and its charitable mission. The same applies to employees, as it enables staff to participate in an important strategic decision. This also encourages greater levels of employee support — both financially and in terms of volunteer time — for future charitable events and campaigns.

4. Thoroughly vet the charity. Once your leadership team has identified a charitable organization, you should carefully investigate it before formally committing your support. How much money do they really put towards their stated mission? There are some helpful resources available you can use in your evaluation, including Charity Navigator, CharityWatch and the Better Business Bureau’s Wise Giving Alliance. All are credible sources of detailed information about charitable organizations, including how they are structured and how they manage and allocate donations.

5. Start small. Once you have identified and vetted your chosen charity, it is advisable to begin with a test campaign or two, then ramp up your support. Try a fundraiser within a limited geographic area — say one or two branches. Have a defined timeline and goal you are working to achieve. Once completed, carefully evaluate how it went. What worked? What could have been better? How easy was the charity to work with? Was the response from your customers and employees a positive one?

6. Grow the relationship. Assuming a successful test campaign, begin to ramp up your level of support. This is also your opportunity to effectively leverage marketing and public relations to promote your institution’s level of involvement and support for the charity. Good charities do good work; your brand should benefit publicly from your commitment and support.

From little league teams to blood drives, financial institutions have a proven history of giving. To be in a position to make a meaningful impact through a charitable partnership is a privilege and with a thoughtful, prudent approach, can be one of the best investments that you can make in your community… and your brand.


J. Blair Logan is Senior Vice President and Group Director at the William Mills Agency, a financial public relations and marketing services agency headquartered in Atlanta.

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