Community banks often have prominent roles in donating to charities and sponsoring events in the cities and towns where they have branches, committing a percentage of their annual earnings – as much as 10 percent – to community giving. 

Some community banks, including those that are mutually owned, have taken a further step in their philanthropic endeavors by setting up a charitable foundation that gives out grants separate from the bank’s earnings.  

“The Coop has had a long history of charitable work with nonprofits, and prior to the foundation, that giving was always based on the bank’s financial ability to be philanthropic,” said Lee Ann Hesse, a senior vice president at The Cooperative Bank of Cape Cod. “If we had a good year, we could give more; if we had a challenging year, like in 2008 like many banks did, those were lean years for our community support.” 

Help in a Crisis 

When Taunton-based Bristol County Savings Bank began preparing for its 150th anniversary in 1996, the board of directors wanted to do something for the community instead of celebrating with a big party, said Michele Roberts, the bank’s executive vice president and chief marketing and community relations officer.  

The bank decided to establish a private charitable foundation, starting off with $1 million in funding from capital gains in the bank’s equity portfolio. The foundation today has more than $26 million, and marked its 25th anniversary in 2021. 

The foundation has two grant cycles every year, budgeting about $2.5 million for community giving this year. The annual amount has steadily increased over the years, said Roberts, who is clerk for the foundation’s nine-person board of directors and has been involved with the foundation since its beginning. 

To gather information about how best to invest the funds in the community, the bank also has separate advisory boards with bank corporators and community members representing each of the three regions where the bank operates. 

“It’s not going backwards,” she said. “The need just continues to grow.” 

Even at 25 years old, the foundation continues to evolve as well.  

PHOTOS: A Year in Giving

The foundation had focused much of its giving on three areas: affordable housing, economic development and financial literacy education. The pandemic led the foundation to switch gears, Roberts said, to add a fourth area of focus – community impact and stability – that recognized the impact of the pandemic on nonprofit organizations, fundraising opportunities and resources. 

“A lot of these were our long-term community partners, and we really didn’t want to walk away from them,” Roberts said. “We wanted to make sure we were prudently helping them to move forward.” 

Bristol County Savings Bank has two full-time employees dedicated to community support. Roberts said the bank did not want a foundation that wrote checks and walked away. Instead, the bank has built relationships with organizations in its market, often giving them annual donations.  

Bristol County Savings Foundation’s first grant went to a local fire department in 1996. To mark the foundation’s 25th anniversary, the foundation gave $25,000 grants to the 13 fire departments in the communities where the bank has branches. Photo courtesy of Bristol County Savings Bank

Building Links, and Communities 

Bristol County Savings Bank’s acquisition of Freedom National Bank in 2020 ended up opening an opportunity for another bank to start a foundation. 

Lee Bank in Berkshire County, a subsidiary of the same mutual holding company that sold Freedom National Bank, had been considering starting a charitable foundation to have a different way to invest in the community, said Chuck Leach, the bank’s president and CEO. The holding company’s sale accelerated that process, Leach said, and the foundation launched this year. 

“It signals more strongly our commitment to the community,” Leach said. “It’s been beneficial from an overall brand standpoint in supporting our headline strategy, which is to empower our community, our employees and our customers – in no particular order – on any given day.” 

Lee Bank has committed to $5 million in funding for the foundation, and the bank expects about $250,000 in quarterly grant cycles each year, depending on how the underlying investments perform, said Alison Brigham, Lee Bank’s assistant vice president of marketing and community engagement.   

Employees will have an opportunity to participate in decisions around grant approvals, with two seats on the foundation’s board reserved for employees, who will have one-year terms. Leach said these seats will contribute to employees’ career development and their understanding of philanthropy. 

“We’re trying to give a younger employee exposure to this whole process and how a foundation works and how grant requests work, sort of a philanthropic mindset,” Leach said. 

The bank still has work to do in letting the community know about the foundation, Leach said, noting that the foundation had expected to receive more grant requests than it has so far. The 2021 requests came more often from the southern part of Berkshire County, Leach said, and the foundation plans to reach out more to organizations further north, where the bank already has one branch and plans for another new branch. 

A Tool in Recruitment 

After Lisa Oliver became The Coop’s president and CEO in 2017, she saw an opportunity to sell the bank’s small stock portfolio, which had performed well, said Hesse, The Coop’s chief engagement officer. With $2 million in funding, the Cooperative Bank of Cape Cod Charitable Foundation Trust launched in 2018.  

Diane McLaughlin

In creating the foundation, Hesse said, The Coop was also looking ahead to this year, when the bank celebrated its 100th anniversary and the start of its next 100 years. The bank gave an additional $100,000 in grants this to mark the anniversary. The foundation has given out $598,000 in total since its inception. 

Hesse described the bank’s foundation as still young, but already bringing benefits for the bank. Employees cite community support as a reason to work for the bank, she said, and some customers say they do business with The Coop because of the charitable giving. But the main upside to starting the foundation has been to increase the help the bank gives to the Cape Cod community. 

“It just extended and increased the reach of our philanthropy, because we provided earmarked funds in the corpus of the trust, and as that grows, our giving can grow,” Hesse said. “That’s regardless of the earnings of the bank.”