How much can one financial institution do for a community that struggles with unemployment, crime, drugs, and other issues on the level that Baltimore does? Can one credit union really make a difference in a city of 600,000, where 23% of residents live below the poverty line?
These challenges may seem insurmountable, yet MECU of Baltimore, Inc. ($1.2B, Baltimore, MD) believes it has a responsibility to try.
Those efforts haven't gone unnoticed by the public, and MECU has won several awards — including CUNA's Dora Maxwell Social Responsibility Community Service Award and the Louise Herring Philosophy-in-Action Member Service Award — as a result of its proactive outreach.
But with more than 280 employees constantly engaged in so many different causes, including feeding the hungry and homeless, raising money for cystic fibrosis and other diseases, and running an annual book drive for local schools, MECU has also had to invest in some important tools and resources in order to filter and focus these efforts, confirm that the desired impacts are actually occurring, and ensure that no additional opportunities are being overlooked in the shuffle.
"We try to put it down on paper because these activities add up to thousands of hours and we don't want to lose track of what is taking place," says Gary Martin, CEO and the credit union's former chief lending officer.
Today, two charts now serve to effectively encapsulate and catalogue all of these many efforts. The first, referred to internally as the culture of caring chart, focuses on direct boots-on-the-ground philanthropy and has five main branches: community, financial literacy, partnerships, education, and fundraising events. From there, each branch separates into specific programs and events the credit union is involved in, 42 in all.
A second chart captures MECU's corporate contributions — i.e., those efforts where the credit union must rely on or work with third parties in order to deliver resources and assistance. This chart includes another 56 programs, only a few of which overlap with those listed in the culture of caring visualization.
Looking at both charts together, it can seem like a very complex formula. But according to former CEO Bert Hash, who retired this summer after a 17-year tenure, all any cooperative really needs in order to mimic MECU's effectiveness in this area are the following ingredients.
Put A Face On Charitable Giving
Anyone can write a check, but donating hours of free labor is much more personal. Because all employees — from senior executives to tellers — are expected to physically volunteer in some way, MECU has been able to put a very human face to its formidable community-building efforts.
"We have fewer than 300 employees but we are in the community all the time," says Kathy Day Shelton, MECU's chief operating officer.
Between 2003 and 2013, MECU employees directly contributed approximately $667,300 toward community redevelopment while also volunteering 33,542 hours of their time, valued at more than $977,000. This investment of both time and money is a crucial differentiator that helps set MECU apart from other businesses in the community. For example, when working with Habitat for Humanity, the credit union not only buys the nails but also swings the hammer.
"I don't even paint in my own house," says chief financial officer Adrian Johnson. Yet this hasn't stopped him from directly donating many hours of his time and labor to the Habitat program.
Lead By Example
The credit union encourages all its employees to volunteer in the community, but residents do tend to take more notice when busy senior executives show up along with everyone else.
A lot of business leaders write checks, but far fewer choose to actually go out and roll their sleeves up, Johnson says. "Residents in the community will say to our executives, 'Wow, you came out here to do this?' And they'll realize that if these individuals can do it, they can do it too."
In fact, many MECU employees today choose to volunteer because of the on-deck example Hash set during his time as CEO. After 44 years of working for Baltimore-based financial institutions, Hash had a Rolodex full of contacts that has allowed him to bring countless charitable efforts together. His involvement could easily have ended there, but it didn't.
"He is just one of a kind and a great role model," says chief branch officer Patricia Roberts, adding that while CEO, Hash would roll up his sleeves, help build homes, and even pick up trash off the floor just like anybody else.
Partly because of this former leader's infectious enthusiasm, the number of volunteer hours that MECU staff devoted actually grew more than 16 fold from 2003 to 2013.
Employees also have another very powerful incentive for volunteering. Because so many either grew up in or currently live in Baltimore City, they tend to have a vested, personal interest in the region's well-being.
"They enjoy being out in the community," Shelton says. "This is who we are."
Mix Business With Philanthropy
Although giving back to the community is its first priority, MECU isn't averse to combining business and charitable interests when it makes sense to do so. Take, for example, its partnership with two local Habitat for Humanity affiliates, Chesapeake and Sandtown. In addition to volunteering hours of labor to construct houses for low-income families, MECU also provides zero-interest-rate loans to those homeowners.
During the credit union's 17-year partnership with Habitat, Martin estimates MECU has assisted the Sandtown affiliate with more than 150 houses, either by offering financing or by helping with the actual construction. And through its work with both affiliates, Martin says the credit union has financed about 120 loans.
Invest In Students
A large percentage of MECU's membership comes from school employees and students, so it makes sense that an equally large part of its community outreach focuses on financial literacy programs, as well as foundations and scholarships to help support Baltimore's college-bound population.
At the nine elementary schools that MECU adopted in Baltimore City, employees devote volunteer hours for running events like the annual book drive while also directly contributing school supplies. MECU even has two student-run branches at local high schools and these locations fulfill two goals: First, they bring in new accounts, about one a week at each institution on average. Second, they give Baltimore's youth an alternative to check cashers that charge a fee for their services.
"We don't want them to have to go to the liquor store or the check cashing corner," Roberts says.
"We want them to have a financial institution so they can learn the benefits of being part of a credit union."
Instilling those lessons at a young age not only helps these teenagers develop better financial habits but also develops lifelong members of the credit union.
Seed Neighborhood Events
By partnering with the Baltimore Office of Promotion and Arts, MECU gives grants of between $750 and $1,000 to city neighborhoods to be used as seed money for community events. In the past, such funds have paid for back-to-school events, health fairs, farmers markets, and even neighborhood block parties. In 2014 alone, MECU expects to award 79 neighborhood grants, totaling approximately $70,000, Hash says.
These events are "an opportunity for these young kids to have something to do on a Saturday or Sunday," says Herman Williams, MECU's board chairman. At the same time, there's also a real-world marketing benefit that results from sponsoring these get-togethers.
"There's no way we can effectively reach out in person to all the different neighborhoods where our members and potential members live," Martin says. This is why MECU staff prefers to focus on hosting these centralized events that help bring the community to them.
Focus On Members, Not Returns
Apart from getting the word out about MECU and attempting to demonstrate the value of becoming a member, the credit union doesn't look for a hard-dollar return from its charitable efforts. Rather, it uses member feedback — typically collected from the business development team, representatives from MECU's SEG groups, or board members themselves — to determine whether or not particular investments have been successful and worthwhile.
Of all the ways the credit union gives back to its community, there's one that members obviously love the most — bonus dividends and rebates. In fact, MECU has paid a bonus dividend and loan rebate every year since 1981 — half in June and half in December — and according to its 2013 Annual Report, it gave out $3 million in such funds last year alone.
At a time when so many businesses are taking resources out of this hard-hit community, MECU is using every possible opportunity to do the opposite and put resources back in. And the power of that difference continues to amaze, even for those individuals who have been aware of it all along.
"Sometimes it's strange to know that you are a financial institution and people are happy with what you do," Williams says. "It makes you feel good."