So We Are a Not-for-Profit, Now What?
By. Henry Meier, Credit Union Association of New York
There are two kinds of corporations: those that define themselves and those that get defined every day. For too long, credit unions have brought a pair of scissors to the public relations gunfight that the banking industry has been waging against it for decades and the result is lackluster legislative success and a place in the public consciousness which, while well respected, is still not as highly regarded as the George Bailey personified community banks, notwithstanding the fact that credit unions represent more of what Community Banks say they are than do most Community Banks.
Why is this? In part, it’s because what the industry recognizes as its greatest strengths the public regards with indifference or skepticism. Think I’m exaggerating? At your next dinner party mention you work for a credit union and explain to the uninformed that credit unions are not-for-profit member- owned cooperatives. Those people whose eyes haven’t glazed over will ask you what you think about the future of the union movement. They will explain that they are not eligible for membership and at least one person in the room will declare that there are too many tax-exempt organizations and ask you why credit unions shouldn’t be paying taxes at a time when the country needs revenue.
To be sure, all these assertions and questions can be easily addressed, but the very fact that they have to be addressed in the first place underscores a fundamental failing of the industry: for too long it has highlighted the unique aspects of its structure which it considers to be its greatest strength while overlooking the fact that the vast majority of potential members do not understand or care about these differences.
When a person walks into a bank for the first time they understand that there is nothing prohibiting them from engaging in banking activity so long as the services and products being offered fit within their budget. Before someone walks into a credit union he or she has to overcome all the misconceptions of my dinner party guests.
Now, don’t get me wrong. I am not biting the hand that feeds me and my family. The tax exemption granted to credit unions is vital to the industry’s survival and the communal not-for-profit structure is ultimately what enables credit unions to both provide cost-effective competition to banks and a helping hand to persons of modest means. But the reality is that these facts alone are of little interest to the young parent trying to stretch a budget so she can stay home with the child; the mom and dad trying to seek the best way to save for college or the retiree trying to save every penny.
All this may seem obvious, but the industry as a whole has been AWOL when it comes to presenting itself to the public in a way which both intrigues potential new members and informs them of the important role credit unions play. This can and should be remedied.
One of the primary responsibilities of both state and national associations should be to mount national advertising campaigns not just sporadically but as a core part of their ongoing responsibilities-think “got milk,” but for credit unions – to raise the profile of the industry as a cohesive unit with a story to tell. Crucially, the advertising campaign would de-emphasize those aspects of the industry we consider so important and instead emphasize the practical benefits of the credit union industry and the important role it plays in the financial system. For my money, one of the best ads aired during the Super Bowl was Ram Truck’s ode to the American farmer. Not a single mention was made of new efficiency standards or durability, but there’s no way you can watch that commercial without thinking that the pickup truck is as wholesome as the American heartland. Let’s explain to the American public not just that we are cooperatives but we are small businesses dedicated to helping that farmer get a loan for his tractor or the young doctor start his first practice in underserved area. In other words let’s make sure people know not just what we are but why we do what we do and why it’s important.
An effectively organized national advertising campaign will have the added benefit of freeing individual credit unions to emphasize more of what they do and not just who they are. After all the most effective credit union commercials often don’t even mention credit union or the not-for-profit status but instead emphasize their value to the communities in which they are located or the products they provide.
Credit unions, irrespective of their asset size, have a great story to tell that goes far beyond being different than banks or being not-for-profit institutions. For too long, we have let ourselves be defined by these criteria. It’s time to get the whole story out.