A POLICY of GIVING GIVES BACK

By Meyeroff, Wendy J. | Independent Banker, April 2011 | Go to article overview

A POLICY of GIVING GIVES BACK


Meyeroff, Wendy J., Independent Banker


IN INDIANA, FIRST BANK OF BERNE GETS FORMAL ABOUT REGULARLY DONATING PROFITS TO COMMUNITY CAUSES

When immigrants from Bern, Switzerland, established the town of Berne, Ind., in 1891, they probably couldn't imagine the eventual effect of Berne's community bank: First Bank of Berne is one of the leading supporters of nonprofit programs there and in the eight nearby areas in which it has branches (the latest is in Van Wert, Ohio).

"This bank has always had a policy of contributing back to the community," says Kent Liechty, a native Berne resident who began serving as First Bank of Berne's CEO and president last May. "Sometimes it was employees giving their time; others it was actual monetary donations."

About 10 years ago, First Bank created a formal community donation and giving-back program under previous chief executive Charles Isch. Since the program's launch with $20,000, the community bank's donations and tangible dividends in helping people have grown exponentially. Last year the bank gave approximately $200,000 to about 95 local nonprofit groups and charitable causes. "And that's only counting the official contributions of $500 and up," adds Teresa Flaugher, First Bank's marketing director.

First Bank's community giving program emphasizes family-oriented causes that in turn support many others-such as 4-H, Junior Achievement and the Boys and Girls Clubs of America, Liechty says. The bank's employees also seek less well-known but still worthy causes to receive donations. That's how some of the program's donation money went to a women's shelter in Van Wert, while other funds went toward enhancing a playground in Decatur, Ind.

"For a decent playground, we had to drive our kids almost 45 minutes to Fort Wayne," says Abby Dyer, who chaired the fundraising efforts of her local chapter of Mothers of Pre-Schoolers (MOPS), an international support network for women with young children.

"I have three kids, ages five, four and 19 months, so that's quite an expedition," she adds. "When First Bank of Berne gave us $1,000, we were thrilled. It acted as our seed money and gave us confidence to proceed." The 10 members ultimately raised more than $50,000, and their new playground equipment is to be installed this spring.

Penny Parrish, Decatur's branch manager, discovered MOPS's need through her involvement with the Rotary Club. Another cause she works with is a nonprofit called Walk for Warmth, which helps pay winter energy costs for low-income residents.

This kind of networking and volunteerism is standard among First Bank employees-and it adds up to help many people and families throughout the community bank's service area. As the Troubled Asset Relief Program started in 2008, Parrish recalls, "we got a lot of crossover from people who were disenchanted with how the bigger banking entities treated them." And with the giving program in place, First Bank's surrounding community benefited as much from the surge by consumers to seek out community banks as did the bank itself.

Here's how First Bank determines the donations it makes through its giving program: The central office has developed a formula that determines both its total profit bankwide and what percentage of that profit can be attributed to each branch. So if 2 percent of First Bank's profits for 2010 were attributed to branch X, branch X would received 2 percent of the $200,000 to distribute as community donations.

Branches have no quotas to meet; instead, contributing to the bank's success helps community employees give back to their community, which Flaugher believes is a win-win situation. Despite the uncertain economy during the recession, First Bank went from $415 million in assets in 2009 to $426 million early this year, something Liechty also attributes in part to the community bank's formal and highly visible donation program.

While upper management approves donations, the bank's 115 employees help determine which organizations receive money as well. …

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