Banks help communities with philanthropy

If you’ve ever been to the Idaho Shakespeare Festival, you know the person announcing the night’s performance and sponsors – typically producing artistic director Charles Fee – concludes with: “And our season sponsor, for the 20^th consecutive year, is …” and the audience shouts, “KEYBANK!”

“It gets our name out there,” said Debbie Trujillo, corporate responsibility officer for the Rocky Mountain region of KeyBank, which covers Colorado, Utah, and Idaho. The bank has similar major sponsorships in most cities in which it operates, she added.

KeyBank isn’t alone. Throughout Idaho, banks play a major philanthropic role in communities, whether through direct financial contributions or in-kind contributions of employee time and talent.

“Banks play a significant and important role in Idaho philanthropy,” said Jennifer Oxley, chief communications and marketing office for the Idaho Community Foundation, a Boise-based nonprofit that accepts contributions from donors and makes grants. “All or most of the banks are active in the community in some way, whether it’s with sponsorships, volunteering or other support.” For example, the foundation receives donations from U.S. Bank, D. L. Evans Bank, and Washington Trust Bank, which helps it fund grants. “Our relationship with U.S. Bank, in particular, stretches back decades,” she said. “When we were established 30 years ago in 1988, U.S. Bank allowed us to have rent-free space in the U.S. Bank building. That was a generous benefit that allowed the Idaho Community Foundation to concentrate on our mission.”

Of the 12 Idaho community banks headquartered in Idaho, a total of 1,971 employees provided 56,240 volunteer hours, said Trent Wright, president and CEO of the Idaho Bankers Association, in Boise. In addition, they provided $1.1 million to charitable organizations, he said.

Some banks have a corporate giving program, some have a foundation, and some, like First Interstate, have both, said Kelly Bruggeman, vice president of the First Interstate Foundation, based in Billings, Montana. The bank contributes a minimum of 2 percent of its net income before tax each year – $3.2 million in 2017, she said. Idaho organizations the bank supports include the Home Partnership Foundation and Boise Valley Habitat for Humanity, she said.

Banks don’t donate purely out of the goodness of their hearts. As part of the Community Reinvestment Act, banks are rated as part of their compliance, Bruggeman said. And banks have been criticized for using philanthropy as a marketing tool, such as making donations to organizations with good demographics – like the Idaho Shakespeare Festival. “You see banks advertising or providing grants to places that are frequented by the kinds of clients that they are trying to attract as bank clients, like elite cultural organizations,” said Aaron Dorfman, president and CEO of the National Committee for Responsive Philanthropy, in Washington, D.C. “The line gets a little blurry. Is this marketing, or true philanthropy?”

Increasingly, though, banks are donating to economic development causes. “We’ve really tried to concentrate around community development and affordable housing as our main philanthropic priorities,” said Brian Stewart, relationship manager with the Office of Nonprofit Engagement for JPMorgan Chase & Co., in Portland. Idaho programs the bank supports include NeighborWorks Boise, the Treasure Valley Education Partnership, and job programs such as Life’s Kitchen, he said.

Employees contribute as well. In 2017, employees in Utah and Idaho raised $765,000 for the United Way, said Toni Nielsen, region president for western Idaho for Zions Bank, in Boise. Most employees are involved with at least two nonprofits – one with a networking component “and one they’re passionate about,” she said.

In response to the 2017 Tax Cut and Jobs Act, some banks said they would be increasing philanthropic efforts. For example, U.S. Bank donated an additional $150 million to its foundation, said Justin Smith, U.S. Bank region president in southern Idaho. But most Idaho banks said the tax cut wasn’t changing their philanthropic plans.

As well as helping society, bank philanthropic efforts can also be good for business, Dorfman said. “A lot of corporate philanthropy is from the desire to give back to communities, but there is self-interest as well,” he said. “When you lift up the most vulnerable, that makes the whole society stronger and healthier – and that’s good for banks.”