Making Change: How Financial Institutions Empower Communities

Strategic Investments

Supporting local communities isn’t just altruistic; it’s about making strategic economic investments in the community. “To us, that means doing business fairly and responsibly, promoting diversity and inclusion, and making meaningful investments in places where we work and play,” says Lori McCaffrey, KeyBank Alaska market president and commercial banking sales leader.

In Alaska, KeyBank supports low- to moderate-income communities with education, workforce development, environmental issues, and growing neighborhoods. In 2023, the bank invested in organizations like Rural Community Assistance Corporation, a California-based nonprofit focused on safe and affordable drinking water. Not to be confused with Rural Alaska Community Action Program, which received a grant from KeyBank to support its Teacher Apprenticeship program.

“These are just small examples of KeyBank’s support to the community,” McCaffrey says. “Over seventeen organizations received funding from Key to support many different programs and activities making meaningful and impactful change in our state.”

In the finance industry, “community bank” refers to a locally owned and operated depository institution that, in contrast to a regional or national bank, responds to the needs of neighborhoods where branches are located.

Northrim Bank is an example. “We live and work in the same community and want to ensure our neighbors have the help and support they need,” says Northrim Marketing and Communications Director Kari Skinner.

Northrim has collaborated with Cook Inlet Housing Authority for more than twenty years, financing and investing more than $60 million in low-income housing tax credits that have yielded many new housing units in Southcentral. Northrim has also given financial support and board leadership to Housing Alaskans, a nonprofit housing trust formed in 2022 to produce, preserve, and protect housing. Furthermore, “As longtime supporters of NeighborWorks Alaska, we are committed to providing resources to the housing issues in Anchorage and throughout the state,” Skinner says.

Selection Criteria

Financial institutions are meticulous about the charitable organizations and causes they choose to champion. They typically prioritize projects that match the institution’s core values and mission. Initiatives with the potential for significant or long-term impact also receive preferential consideration.

Northrim, for instance, favors programs that strengthen low-income individuals and families and provide community and economic development, including affordable housing, health and wellness programs, and higher education through Alaska’s Education Tax Credit program. The bank reviews requests on an annual basis and selects those most closely aligned with its focus areas.

“We also work with customers to support community projects and programs they are involved in as we understand the effect they can have within their respective communities,” Skinner says. “Throughout Alaska, we work with our employees to support nonprofits that are making an impact in the community.”

At First National, a Donations Committee and the bank’s executive leadership team oversee charitable giving to ensure consistent practices. The committee reviews most donation requests from Anchorage and other Alaska communities, while branch leadership may consider smaller local requests.

Each request is evaluated to assess if the nonprofit organization is active and in good standing with all state and federal registration and licensing requirements. The committee also determines whether the request aligns with the bank’s focus areas for charitable giving—youth, education, and emergency services—and considers factors like volunteer involvement, budget constraints, and bank policies.

“While First National cannot fund every request received, this stance is not a reflection of the value of any specific nonprofit organization or program,” Pope says. “It can be challenging to balance the bank’s budget, resources, and the volume of requests while also ensuring the bank’s charitable contributions are impactful and help improve the quality of life for Alaskans.”

Facilitating Change Through Employees

Employees often play a central role in financial institutions’ ability to empower and enhance communities. Northrim Bank is a strong advocate of employees volunteering and giving to causes they are most passionate about. In 2023, it contributed more than $1 million to support local communities throughout Alaska, and its employees volunteered more than 2,500 hours. Volunteer activities included teaching financial literacy to youth and adults, sorting food at local food pantries, working in animal shelters, and coaching youth sports teams.

“Employees are encouraged to serve in leadership roles with nonprofit organizations and to share their expertise in the community,” Skinner says.

CU1 could not accomplish all that it does in Alaska without the “authentic buy-in” of its employees, says Community Outreach Manager Tiarra Gustin. The credit union’s personnel volunteer to deliver Commodity Supplemental Food Program food boxes, support fundraiser events statewide, and teach financial literacy at local schools through Junior Achievement’s JA in a Day program and through Financial Reality Fairs. CU1 also encourages its leaders to coordinate social projects with their teams, which include member-facing fundraisers and team volunteer activities.

CU1 rewards employees for consistent outreach efforts. All employees receive a special-edition volunteer t-shirt when they sign up for their first event and a special pin after they complete five volunteer hours. “Upon completion of ten, twenty, and forty volunteer hours, employees receive ‘employee points’ that can be redeemed for PTO, cash, or funds to be spent in our internal logowear store,” Gustin explains.

Many of KeyBank’s teammates are engaged with local nonprofits through board service and/or volunteer activities. For example, the bank’s annual Neighbors Make the Difference Day supports teammates stepping away from their desks and giving back to organizations in need through activities like gardening, painting, and food sorting. “This day is recognized throughout KeyBank’s entire network across the country, but it was originated in the great state of Alaska, something we are very proud of,” McCaffrey says.

Local employee involvement has long been a key feature of First National’s community development efforts as employee involvement fosters pride and helps develop leadership skills, Pope says. During the bank’s centennial celebration in 2022, each branch selected a nonprofit to receive a $1,000 cash or in-kind contribution, benefiting organizations like youth shelters and senior centers. First National’s commitment to community development and charitable giving is also highly valuable to its efforts to recruit and retain a talented team of local Alaska employees.

“The bank’s ever-ready, enthusiastic, and committed employee volunteer corps further demonstrates congruence between the bank’s charitable or philanthropic activities as well as its main business of providing Alaskans financial services,” Pope says.

Measuring and Continuing Impact

How do institutions measure the effect of their philanthropic efforts? Usually by quantifying metrics like dollars invested, jobs created, and beneficiaries served. Success stories of changed lives, improved infrastructure, or community resilience are also revealing indicators.

First National views the effectiveness and impact of its community support through several lenses, including geography or regional impact, employee participation, and factors like the bank’s focus areas and the type of nonprofit organization. Pope, who volunteers as board chair of United Way of Anchorage, is particularly proud of the bank’s response to the increased demand for food assistance in 2020 during the COVID-19 pandemic.

“With the support of partners, we successfully coordinated and broadcast the ‘Spirit of Alaska’ virtual holiday concert, featuring more than twenty local artists,” she recounts. “First National’s full underwriting of the event with a $37,000 investment allowed viewers to donate directly to the United Way of Anchorage’s Restaurant and Hunger Relief Program. The event raised a total of $23,015 from ‘attendees,’ and additional matching donations of $26,985 brought the total contribution to $73,015, with approximately 85 percent directed to the United Way’s Restaurant and Hunger Relief Program.”

By February 2021, the program had helped 320 restaurant employees and delivered 69,000 meals to Alaskans in need. The donation helped employ restaurant workers—cooks, dishwashers, and delivery staff—and covered the cost of food and supplies to prepare and deliver welcome meals to low-income, food-insecure families, children, youth, and seniors. Pope says, “It was a true win/win, supporting both the community and local businesses when they needed it most.”

Northrim carefully considers the level of success of an organization’s program—especially if the entity has an established relationship with the bank—to ensure its financial support is providing a lasting effect to the local community. Since its inception, Northrim and its employees have contributed more than $2.8 million to support United Way. In 2023, employees participated in the annual United Way Campaign and pledged $150,000 in support of local communities, Skinner says. This total includes direct donations from employees and Northrim’s 50 percent match.

Supporting the local community was paramount to Northrim’s founders, and that remains true today, Skinner says.

“Our involvement throughout the state has increased as we have added locations in Eagle River, Fairbanks, Homer, Juneau, Ketchikan, Kodiak, Nome, Sitka, Soldotna, and Wasilla,” she says. “We are proud that we have been able to volunteer in more locations and support a larger number and wider variety of projects as we have grown.”

With their ongoing commitment to invest in Alaska’s communities, financial institutions strive to create a permanent ripple effect of positive change. For instance, McCaffrey says KeyBank will never stop supporting the Alaska community. “Philanthropy is not just something we do at KeyBank; it is who we are,” she says. “When the community is supported, we all win.”

Likewise, CU1 is committed to fostering an inclusive and supportive environment for all Alaskans. Burgess says, “We believe that true community engagement means continually evolving to meet the needs of those we serve, particularly within diverse communities. Our efforts are driven by a commitment to making lasting, positive impacts on the people and places we call home.”