As co-owners of a worker-owned B Corp marketing agency, we find it rather unfortunate that our core clients, credit unions, can’t be B Corps themselves.
While the B Corp certification, which measures a company’s entire social and environmental impact, is meant to be broad enough to be relevant to businesses in any industry, of any size, it only applies to for-profit companies. Thus, credit unions, unlike banks, cannot officially earn a B Corps designation.
Still, there are many areas in which B Corps, credit unions, and other cooperatives see eye to eye. The B Corps movement stems from the belief that our capitalist system isn’t fatally flawed, but that it’s serving humanity poorly because companies are rewarded based on an incomplete picture. Financial results fail to fully measure the impact of a business on society—whether that impact is positive or negative. It’s kind of like driving a fogged up car and making decisions based only on what we can see out of a small part of the front windshield.
Most of the assessment criteria is relevant to credit unions, particularly those around Impact Business Models, or IBMs. IBMs refer to the ways that an organization creates specific positive benefits or outcomes for its stakeholders through its products, processes, activities, and/or structure. As cooperatives, credit unions exist to put service and benefit to their members above all else, which aligns quite nicely with the definition of an IBM.
That said, some credit unions bake more impact into the cake, so to speak. For instance, credit unions that have been designated Community Development Financial Institutions (CDFIs), Community Development Credit Unions (CDCUs), or Juntos Avanzamos Credit Unions are taking concrete steps to ensure that their impact efforts are specific, material, verifiable, lasting and extraordinary.
These five elements, in fact, represent the underlying principles of an Impact Business Model. Let’s examine them one by one:
Specific. For something to meet the IBM’s “specific” criteria, it has to be done with the intention of creating a particular, positive outcome for a targeted group of shareholders.
For this category, we offer Portland, Oregon based Point West Credit Union and their “Banking without Borders” commitment. Point West focuses on financial inclusion and empowerment for the underserved in its community, with a focus on immigrants, communities of color and small businesses.
More than 40% of Point West’s membership are people of color, many of its staff are bilingual and the credit union has a Juntos Avanzamos designation and has been certified as a CDFI. Other stand-out stats: in 2019 30% of the credit union’s loans went to non-citizens and more than half of all new loans were for members whose annual incomes were $50,000 or less.
One last proof point for Point West’s hitting a home run on “Specific”? Its Declaration of Beliefs, which captures the credit union’s commitment to providing lending and services to immigrants and welcoming people who have been turned down for financial services elsewhere.
Material. This category requires an organization to deliver a positive, significant impact for a particular stakeholder. One great example: Hope Credit Union.
What makes Hope a material standout? Their commitment to the unbanked and underbanked in the five states they serve throughout the Deep South: Alabama, Arkansas, Louisiana, Mississippi and Tennessee. And, just as important, their willingness to seek out creative solutions to make that commitment possible.
Because so many of Hope Credit Union’s members live in poverty, it’s extremely difficult for the credit union to build the deposits necessary to fund local business loans and community investments. With its Transformational Deposits program, Hope invites people and organizations who are located outside their five-state region—to invest in their community through deposits into money market accounts and share certificates.
The Transformational Deposits program had an initial goal of attracting $100 million in Transformational Deposits. As per the credit union’s 2021 impact report, Hope has attracted more than $116 million in Transformational Deposits (including from PixelSpoke) and 94% of those deposits came from 36 states outside the deep south.
These deposits helped enable HOPE to make 2,630 commercial loans in 2021, 71% of which went to companies owned or led by people of color. The loans totaled more than $85 million and facilitated the creation or retention of 6,597 jobs.
Verifiable. Perhaps unsurprisingly, an organization’s IBM has to be verifiable —i.e., not an informal process or policy but something the company can substantiate. Clearwater Credit Union ensures that its impact efforts are not only verifiable, but wholly transparent.
Clearwater is committed to being a force for good, becoming more sustainable and improving pay equality. From its dedicated Transparency page on its website, it’s clear that this commitment isn’t just marketing fluff. The credit union offers accessible links that allow any reader—employee, member or website visitor—to see proof of Clearwater’s commitment.
With just a few clicks you can review their financial data, their most recent strategic plan, their environmental impact assessment and not just their compensation philosophy but their actual compensation data. It’s a “warts and all” approach that’s a powerful example of verifiable impact in action.
Lasting. Short-term solutions won’t cut it when assessing an organization’s IBM. To be considered “lasting” a characteristic must be an elemental part of the organization that’s not easily changed. A shining example in this category is Clean Energy Credit Union.
The founders were so passionate about facilitating clean energy that they opted to form a credit union to make their dream of a greener world a reality. They liked the idea of a cooperative business model and felt it would enable consumers who shared their commitment to sustainability to meaningfully participate in the green energy movement—one that didn’t require a large income or a sophisticated understanding of the energy marketplace.
Sustainability is at the heart of this credit union’s story, so it’s no surprise that clean energy solutions they are pursuing are designed to stand the test of time. The founders envision 90+% of member deposits being used to fund things like solar electric systems, electric vehicles, net zero energy homes and weather proofing. As of November 2022 they’d funded their 8,800th clean energy loan in just five years. Members who opt to fund a green purchase through Clean Energy get a lower cost of living and a smaller environmental footprint. And all depositors indirectly play a role in helping create a greener community.
Extraordinary. If there’s one thing that most credit unions struggle with, it’s differentiation. At the end of the day, most credit unions offer a similar suite of products and services, engage in similar community giving initiatives, and are similarly committed to member service.
What’s an example of a credit union that offers an unusual, unique “something” that truly sets it apart from the competition? All the aforementioned credit unions check this box, and it’s worth also highlighting Self-Help Credit Union, which is consistently pushing the envelope when it comes to innovative partnerships and social impact.
Through its family of organizations — including Center for Community Self-Help, Self-Help Ventures Fund, and Center for Responsible Lending — Self-Help is able to proactively tackle social issues from multiple angles. For example, when it comes to affordable housing, Self-Help doesn’t just offer 0% down payment homes loans, it also makes loans to community land trusts and advocates for policy solutions to close racial wealth gaps.