Banks Help Community Projects With Money, Volunteer Time

When there’s a community project afoot, banks and other financial institutions are almost always among the donors.

But their donations are increasingly likely to be at least partially in volunteer time and other forms than entirely in cash, some bankers say.

Wayne D. Stone, president of Bank of Arkansas, says banks have historically and traditionally been involved in the communities they serve. That’s due, at least in part, to the large profit margins banks enjoyed in earlier times, he says.

“This goes back to the days when [banks] paid little, if anything, for deposits” and loan rates were consistent from institution to institution, he explains.

“[Banks] benefited from the community; therefore, they should give back generously,” he says.

Today, the banking industry is considerably more competitive, and, Stone says, profit margins are one-half to one-third slimmer. Yet, banks are still expected to support various causes.

Stone has no argument with that expectation. But he thinks banks can do more than hand over a check.

Thus, his bank has formed a Value Team that provides volunteers to projects the team has selected, whether it’s a Curb the Litter campaign (in which volunteers cleared a stretch of highway) to a small business development forum.

Stone estimates his bank, with assets of more than $100 million, will contribute more than $100,000 annually to the community, a sum that includes both volunteer time and cash.

McIlroy chooses water

McIlroy Bank & Trust’s president, Jim Glenn, found himself drawn to the idea of cause-related marketing. The result is a leadership role in Water 2000, a two-county effort to bring safe drinking water to all residents of Washington and Benton counties.

Representatives of Community Resource Group pitched the idea of cause-related marketing to Glenn, and he found himself immediately interested.

Among the examples used to persuade him was a similar effort by a maker of animal crackers. Apparently, the individual-serving-sized boxes many people remember from childhood had fallen from favor. A box redesign — picturing endangered species rather than circus animals — and a commitment to donate a portion of sales to help save the beasts turned the company around.

Stories like that plus a good local cause — water for all — convinced Glenn that cause-related marketing is valuable.

“It just seemed like a natural fit, a worthwhile purpose that we were also attracted to from a business standpoint, rather than just simply handing over another check to another charity,” he says.

Certainly, McIlroy continues to make cash contributions, Glenn says, but “this was a … different effort that allowed us to tie the bank to a socially responsible cause that was good for our community.” He hopes that, in addition to helping the community, the project will enhance McIlroy’s image and help differentiate it from competitors.

“The social consciousness is high in Fayetteville, so it, again, just seemed like a very good fit for us to be part of a project that was socially responsible.”

Glenn estimates that McIlroy’s contributions for 1998 will exceed $50,000 or $60,000 with the Water 2000 portion representing 12 percent to 15 percent of that amount.

Rogers bank

well represented

Dick Trammel, executive vice president at First National Bank & Trust of Rogers, is a perennial volunteer in his community. From NorthWest Arkansas Community College to North Arkansas Radiation Therapy Institute — and with many other organizations in between — Trammel is frequently on the front line when volunteers are needed.

But he says he’s just one of many volunteers at First National, which urges employees to be involved in community activities, including church and government.

“We encourage our people to be involved and be a part of the community and to contribute back to the people who give us the good life we’ve enjoyed all these years,” Trammel says.

The bankers all say their contributions vary from year to year, depending on what projects are being promoted in a particular period.

First National, for example, was among the largest contributors when the Rogers Chamber of Commerce was planning a new building.

“We know we have to give back in order to have the kind of community we want to live in,” says Trammel, adding, “You don’t do that with [just] dollars. You do it with human resources and visions and making these visions a reality.”

CRA requirements changes

The Community Reinvestment Act was often the catalyst behind banks’ involvement in various activities, but that law’s requirements have changed, bankers say. Banks were required to show that they supported community activities, but, as the law is now applied, institutions’ activities in areas such as providing affordable housing are weighed more heavily in gauging whether requirements are met.

Glenn and other bankers say that, although their volunteer and other efforts may help them with meeting CRA requirements, the measure is so small as to be relatively unimportant.