Good Banker, Bad Banker: How Do You Manage the Charity Challenge? Banks Give Money, Staff Time, and Space Generously to Many Causes, but the Mouths Always Outnumber the Spoons

Article excerpt

Community banks, by definition, maintain a symbiotic relationship with their communities, and devote much effort and funding to causes that make their towns and cities better places to live. Often, in cases such as last year's tsunami and hurricanes, banks and their staffs step up to help folks thousands of miles away, too.

But no bank has a bottomless wallet. We asked our "Pass the Aspirin" bankers how they handle the often delicate challenge of picking those to help and those to send away disappointed. We asked about cash aid, staff assistance, and grants of meeting or parking lot space and gifts in kind.

The response was overwhelming. More answers came than for any "Pass the Aspirin" before--and many bankers wrote back, essentially, with, "I don't have the answer ... but I'd sure like to read the answer!"

"There probably isn't a pat answer to this question we have all wrestled with," one banker wrote. "Several years ago we had a discussion in a board meeting about this. We decided to focus most of our money on local charities, but it's impossible to have an ironclad rule. If our bank's best customer comes in and wants a donation for his favorite cause, he's probably going to get one."

Some of the bankers provided forms that they find helpful to managing the charitable giving process. With their permission, we are making them available on our website concurrent with this issue: www.ababj.com

REMEDY 1

Blair Hillyer, president and CEO, First National Bank, $161.3 million-assets, Dennison, Ohio.

At times, I think we have been overly supportive of all types of community requests, and they seem to keep increasing every year. We try to support projects that benefit the most people, like sports teams, schools, hospitals, the YMCA, hospice, etc. Those decisions are fairly easy, but the amount of the request is usually more than we feel comfortable with.

However, the requests from the smaller organizations just keep growing. We have also found that once you fund them, you are expected to continue forever. It's almost better to say "no" up front.

But decisions must be made. They are usually made by the head of Marketing with assistance from me.

The decision as to who uses the lobby is the toughest by far. Obviously, we don't want someone soliciting or selling in our lobby every time our customer comes through the door, but we haven't found a way to totally stop it without causing a significant political problem.

REMEDY 2

Debra R. Lins, president & CEO, Community Business Bank, $49.7 million-assets, Sauk City, Wis.

We struggle with these challenges and look to make donations that benefit a greater group. For instance, we donated towards a grand piano for the school district, rather than to one child going on a People to People Tour. When we have a situation like the one I just mentioned (the single party benefiting) we may make a small donation if a client is involved.

We do make our facilities available for food drives, bake sales, and the like. And lastly, all of our offices are required to donate time and their services to at least one civic/community organization.

Spending decisions are made by the Marketing Committee at this time, as the "pot of gold" is not large enough to go through a really complicated process.

(Lins provided a sample form and policy document, posted on www.ababj.com.)

REMEDY 3

Kathy Leombruno, vice-president/marketing, Citizens National Bank, $235.8 million-assets, Elkins, W. Va.

Our bank's sense of civic pride and responsibility, though large, can't extend far enough to embrace donating to each of the hundreds of organizations that approach our bank annually for a contribution. We typically support those initiatives that will have the greatest impact on our children, citizens, or communities.

One thing we've tried to do is spend on things that will help groups help themselves. …