So, you think you’ve got problems?
We’ve seen a lot of problems arising in the midst of COVID-19. What this virus is doing to our seemingly distant ‘normal lives’ is second only to the pain it’s causing the families of those suffering from and with it. Whether we have been or are sick, whether we’ve been furloughed or let go, whether we know someone who is suffering or have just seen the stories on the news, we are all living a different life than we lived just a few months ago.
Now more than ever, we are looking at things differently, examining our values and assessing our needs. With so many lives affected, this virus impacts those less fortunate, and those who care for them even more acutely. Needs are greater. Support is needed urgently, but the nonprofit organizations who exist to step in are being hit and hit hard. The very people we turn to for help – need our help, for us to step up, now more than ever.
According to the StarTribune, Minnesota nonprofit organizations lost $1 billion of anticipated revenue in the month of April alone. The Wall Street Journal reported this week that the future of nonprofits across the country looks bleak as their revenue dries up because of the coronavirus. The article quotes Antony Bugg-Levine, CEO of the Nonprofit Finance Fund as saying, “The virus-related revenue disruption ‘is an unprecedented calamity’ for nonprofits.”
As long-standing institutions in our community, credit unions have been there for their membership through previous uncertain times. Credit unions were brought to the US to offer community support to the underserved, and it’s time again. Now more than ever, credit unions will be called upon to lead.
Some credit union executives may worry about an inability to significantly grow membership in 2020 (CUNA projects less than 1.5% growth), or worry about stagnating loan growth or decreasing loan-to-asset ratios. These are important concerns when you exist to serve your members and your community. However, many nonprofits – organizations also serving members and the community – are worried they won’t be in existence by the end of 2020. Nearly half of charities surveyed have fewer than 3 months of operating capital on hand to weather this storm. Most economists expect the economic impact and the effects on nonprofits to last for the rest of the year or even longer.
I remind myself, when working through difficult times, of a quote by author Regina Brett: “If we all threw our problems in a pile and saw everyone else’s, we’d grab ours back.”
What does leadership look like during times like these? First, it starts by realizing you’d gladly take your own problems back out of that pile. Credit unions are positioned to ride out this storm far better than the charities in our communities. These charities are the food shelves, the homeless shelters, the community wellness or education programs and many, many more that are stretching their limits while trying their best to keep doors open and their community served. They are the small and large, hard-working and fragile caregivers to our society. And they’re running out of money – fast.
The Wall Street Journal reported that ninety-two percent of the nation’s 901,206 nonprofits had annual budgets of less than $1 million, and many of these don’t feel like they can ask donors for regular support right now. Now is when they need extraordinary resources to help meet the needs of community members. According to an article by Alan Cantor in the Harvard Business Review, “Nonprofits are reading the room, and the message they’re getting is: Don’t ask for money now. Just don’t.”
Credit unions can step in and lead as the quiet community hero. Credit unions have the opportunity to stand alongside today’s heroes, those on the front lines, and display moral courage through leadership.
“Leading a credit union membership through this time means a lot of things. It’s fiscal responsibility, it’s providing a safe and stable environment for people’s finances and it’s calling those who can help to help as they are able,” says John Ferstl, COO Minnesota Credit Union Network. “Our members start as friends and neighbors and they grow to be like family. When you get to know someone, you treat them differently.”
I recently heard it referred to as “compassionate banking.” If that’s true, how do we show our compassion? As members of a credit union, we want to participate in those initiatives that we feel have been curated by people we trust. As credit union leaders, you are in a position to call on membership to help, and to provide direction.
If we recognize that we are all affected by this situation, then we have to also admit that some are affected more than others. Leaders have a responsibility to seek out and call upon those who are less affected and who can help in times of need. If twenty percent or more of your members are going through job losses and furloughs, that means that the majority of your members might be able to help, if even just a little.
Leadership rallies the call to action and provides a path or vehicle to move clearly forward.
Many hands make light work. With the credit union community, and all of the members served, we have many, many hands willing and able to do a little bit of light lifting. All that is needed are leaders willing to provide the vision.
Last year, SPIRE Credit Union helped launch NetGiver, a mobile giving platform exclusively for credit union members to give to charity. Simply stated, NetGiver allows credit union members to send donations to any 501(c)(3) directly from their checking account. In doing so, donations are not subject to credit card and platform fees which typically result in about 7% or more deducted from every donation.
That little difference can make a big impact. Last month, SPIRE used the NetGiver app to distribute over $150,000 worth of donations to 501(c)(3) organizations in the Greater Twin Cities to help lessen the blow of the current economic crisis. Typically, when $150,000 is donated via credit cards and other platforms, 7% (or more) is lost to credit card and processing fees. According to Feeding America’s website, 7% would provide 105,000 more meals for hungry families.
As impactful as that number is, it’s just the tip of the $10.8 billion that nonprofits lose to fees every year in this country on donations given via credit or debit card. And while it may be argued that those fees are necessary, providing revenue for the industry, please remember that total consumer spending in 2019 was $14.8 trillion dollars. The credit card companies (and interchange fees) will survive being selfless.
Credit unions here have an opportunity to act selflessly, for the greater good of your membership and their community. Offer your members a way to easily make an impact and then challenge them to give – if able – just $5 a week, $10 a week, knowing that every penny matters and every single one of those pennies are received by the organizations being supported. Many hands make lighter work in times of trouble. When your members see a vision, feel compelled to act, and feel proud of the work you’re doing together, your communities will realize the impact. Perhaps there is reward, both abstract and tangible, in the act of selflessness.
Credit unions are not-for-profit too. One reason for this status is that unlike banks, credit unions take profits earned and give them back to members in the form of lower rates, better customer service, and products that improve the lives of their members and their communities.
“As credit unions, it’s in our ethos to give back, as part of our advocacy for the communities we serve,” says Greg Worthen, CEO of Richfield-Bloomington Credit Union. “Credit unions are in a position to make an impact in our communities during this unusual time. Providing our members with ways they can create greater impact – whether in their investments, savings, businesses or in their giving – it’s what we want to be all about at RBCU.”
Whether the impact is made by 100 or 100,000 of your members, providing the vision to reach those in need shows the leadership of the credit union difference.
For the Sake of It
One final note. We recently talked to a VP of finance for a large, Minnesota arts organization who had just enrolled his nonprofit in the NetGiver platform. He asked, “If you don’t charge us for the service, who pays for it?” When he was told that the credit unions provide NetGiver so their members can donate fee-free, he said, “If [a] credit union is willing to do that for us, I seriously need to consider opening an account. Right now.”
Now more than ever, my friend. Welcome.