Folly #11: Banking for Community
How does your money give back?
Let’s talk about banks, philanthropy, and community investment.
There have been some truly egregious practices in banking – from historic redlining, to decades long practices of clearing the largest debits first so others “bounce” (and incur big fees), to last month’s $3.7 billion settlement for wrongfully repossessing homes.
The wave of banking consolidation has made local bankers an endangered species. (My partner recently tried to open an additional account at a major bank where he’s had other accounts for years. We’d been in the branch a few weeks earlier and spent 45 minutes with a branch representative, the same one who turned down this application because he didn’t have the required two forms of identification.)
Are there any George Baileys still out there?
And then there is bank philanthropy. If it’s cause-related marketing that mingles their brand with your nonprofit, it can involve big sponsorship to (usually) big national, nonprofits. If it’s a grant, it can often:
Involve small donation amounts.
Ask grantees to move their banking relationship to the donating bank.
Result in sometimes embarrassing levels of self-promotion.
One large bank invited executive directors and board members of grantees to an annual luncheon, where they boasted about all their good work with nonprofits and lectured us with a 5-year old study on individual giving. Not a single nonprofit spoke about their work, expertise, or community impact. (They gave us a $5,000 grant for a $2M+ capital project, and I was embarrassed that I’d asked our board president to attend with me.) It felt like a corporate philanthropy equivalent of mansplaining.
We have choices. If you’d like to make change with your money (pun intended), here are a few ideas:
Move to a credit union or community bank. My accounts are now with Redwood Credit Union and they make everything easy: they have lots of free ATM partners, they’ll reverse any fee because “it’s not how we make money,” I can walk in a branch and walk out with a new Visa card, and I get a tasting fee waived at 40 wineries. (That one cracks me up. Can’t wait to use it.)
Follow H.R. 8833. Congresswoman Maxine Waters introduced this bill last fall to update the Community Reinvestment Act to ensure that banks serve those who have been historically redlined and left behind by our financial system.
Diversify your fundraising. There are so many sources for donations without strings attached. Make use of free online courses at communitygrantwriters.us, small learning cohorts, and other resources for reaching foundations and donors.
Speak up. Tell us how you leverage your checking and savings for good! Leave a comment with your wisdom below – or let me share it in an interview. Schedule some time for us to talk.