How Charitable Giving Impacts Customer Satisfaction at Banks

Consumers who care about supporting local charities expect the same of their financial institutions. Banks and credit unions run the risk of losing customers to competitors that are perceived as more engaged in their communities. Strong community commitment is a powerful attraction.
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Banks and credit unions recognize that success requires creativity, particularly in how they present themselves to a steadily more discerning customer base.

There is much more to customer and member relationships than simply marketing a low-fee, low-interest-rate credit card.

A recent report based on a survey of over 2,500 consumers showed that nearly three of four consumers give to charity, and they want their financial institutions to also support local causes. Consumers’ desire to see their bank or credit union connect with local charities is strong enough that some people will go as far as to move their accounts to an institution that does.

These are just two key findings in the report, “Financial Institutions and Customer Loyalty: The Value of Investing In Your Community,” a PYMNTS and Elan collaboration.

The most successful financial institutions are active in the communities they serve and recognize that actively participating in local affairs is a necessary part of business. Banks and credit unions would benefit from considering the following insights from the report into how local charitable giving affects where consumers choose to do business.

The Link Between Charitable Giving and Local Businesses

Consumers feel strong connections to their local communities, and many contribute time and money to support local charities.

  • 74% of consumers donated money to charity in the past year
  • 44% of consumers volunteered their time

People who support local charities financially are more likely to do business with local financial institutions, as well as with service providers such as doctors, lawyers, accountants and financial planners.

  • 88% of consumers who donated a significant amount of money to charity without volunteering their time bought meals at local restaurants.
  • 82% percent of consumers who made charitable contributions did business with merchants in their localities.
  • 53% of consumers who donated a significant amount of money and volunteered a significant amount of time to charity did business with local financial institutions.

How Charity and Customer Satisfaction Intertwine

Overall, banks and credit unions seem to be doing a good job with customer satisfaction. For example, 88% of financial institution customers who donated significant money and volunteered significant amounts of time are either very satisfied or extremely satisfied with their primary institution.

A Millennial Magnet:

Just over two out of five Millennials would switch to banks or credit unions that charitably support their local communities.

On the other hand, consumers’ readiness to switch if their bank or credit union does not support local charities is varied, but noteworthy:

For example, 42% of Millennials and 43% of Bridge Millennials (consumers whose shopping and financial preferences straddle GenX and Millennials) would move their accounts to banks or credit unions that charitably support their local communities. The readiness to switch is less pronounced among other age groups, the report found. Just 14% of Baby Boomers and Seniors would switch, and 29% of consumers overall are likely to do the same.

In addition, high credit card spenders, a valuable cohort of consumers, are the most likely to switch to a bank or credit union that donates more to local charities.

Prioritizing Charitable Giving in Your Community

The pattern is clear: 93% of consumers who say their financial institutions were generous with their charitable contributions are very satisfied or extremely satisfied with their primary banking provider, and 86% of consumers who say their financial institutions made more modest charitable donations are equally satisfied.

At Elan, we understand that supporting our partners goes beyond credit card servicing. In 2022 alone, we have donated over $625,000 on behalf of our financial institution partners to nonprofits in their local communities through our charitable giving program. These gifts are paired with in-person volunteer events alongside our partners.

Download the full report for more insights and learn why prioritizing community is necessary.

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