PITTSBURGH — Hill District FCU is using gift cards and a local public health study to better ingratiate itself into the local community.
Known as the Pittsburgh Hill/Homewood Research on Eating, Shopping and Health study — or PHRESH, for short — the project was run by the Rand Corp., and is a five-year endeavor analyzing eating, shopping and health decisions made by those living in neighborhoods known as "food deserts."
As part of that research, the Rand Corp. awarded gift cards to households participating in the interview process — a part of the project that was a natural fit for Hill District FCU.
Richard Witherspoon, CEO at the $3.8 million-asset credit union, explained that Rand "approached us about buying gift cards to give to the people that they service as a reward for answering a survey. They could've gone anywhere and gotten gift cards, but they chose us because they wanted an opportunity to recycle money, so to speak. If they were able to help support us and meet their goals, it was a win-win for everyone."
Despite being based in western Pennsylvania, Hill District FCU uses LSC — the Illinois CU League's service corporation — for its plastic needs, including debit cards and gift cards. Witherspoon told Credit Union Journal that LSC was able to give the CU a price break on quantity, allowing it to make a bit of money out of the deal.
"We would pay $1 per card plus shipping, and we would sell them to the PHRESH organization for $2, so we would reap about 75 cents per card," said Witherspoon. "So if it's 2,000 cards, that's $1,500."
Big Money
That's big money for the small CU, which last year had a net income of negative $9,843. The credit union has just $1.8 million in loans on the book as of its December 2013 Call Report, concentrated primarily in used auto lending and unsecured lines of credit.
Partnering on the PHRESH campaign was a natural fit for Hill District FCU, according to Witherspoon, noting that "throughout our history, of course we have to generate income to sustain ourselves, but very, very rarely in any endeavor that we take on is making money a motivator."
Jim Byrnes, marketing director for LSC, said partnerships such as that between Hill District FCU and PHRESH are a good way to build greater community ties and expose potential new members to the CU.
"Particularly in the case of Hill District, because they are in a somewhat distressed area of Pittsburgh, it gets the message out there that we're not in this community just to make money, but to help make things work," said Byrnes. "And it gets that word out, like I said, that everybody can be members, so it gives them the opportunity to bring additional membership on, as well as serving the community."
Despite having offered a price break, Byrnes noted that, as often as possible, LSC looks for ways to find economies of scale for programs like these when credit unions are working with charities or to benefit the community.
Fewer Requests Coming In
The flip side of that, he said, is that these sorts of requests don't come in as much as they used to. "I hate to admit it that we don't get as many requests as we would hope to, even though we do promote it out there," said Byrnes. "I think it's because of the economy, and a lot of that philanthropic, charitable stuff has slowed down."
But Byrnes noted that charitable programs of this sort may slowly be back on the rise at credit unions. "Last year we had four or five credit unions that looked at similar types of things" to Hill District's partnership with PHRESH, he said. "We've had some years where we haven't had any, so my answer would be yes, it's picking up."
Witherspoon said there have been some slow improvements to the region's "food desert" situation, including the recent construction of a 20,000-square-foot full-service grocery store that the CU helped secure funding. A grand-opening ribbon-cutting ceremony for that facility was held last September.
When it opened, the CU also secured partners in the area to hold financial literacy classes for small businesses at the grocery store, which drew 25 potential small business owners. The lesson here, said Witherspoon, is for credit unions to constantly be on the lookout for local organizations with similar missions.
"Seek them out," he advised. "Don't wait for them to seek you out, because with financial literacy, health, someone's well-being, having an inter-connection with other community groups is paramount. Most community groups or non-profits are clueless in terms of one's financial health, and if they're unable to service their people in terms of financial health, the people that they service are not going to eat right. It all comes together. If they can't manage their money right, they're not going to eat right. They'd rather get a 99-cent Happy Meal than go buy fresh fruits and vegetables. It all ties together."
