Eastern Bank in Boston, which has been quietly channeling a slice of its profits to its charitable foundation for the past 15 years, is looking to get more mileage out of those funds.
The $9.7 billion-asset mutual began donating 10% of earnings to its Eastern Bank Charitable Foundation in 1999. Since Eastern has thrived in recent years earning more than $322 million since 2010 its foundation has grown apace. The foundation's assets hit $86 million at Dec. 31, compared to just $5 million in 1999.
Giving is also on the upswing. The foundation, which issued more than 1,500 grants totaling nearly $6.1 million in 2014, plans to give slightly more this year.
While those are heady numbers for a foundation linked to a 197-year-old mutual, Eastern is keen on making a bigger splash. Details haven't been fully fleshed out, but the foundation's board is weighing a plan to provide more money and larger grants some running into the millions of dollars to areas that it feels merit special attention.
"This is a journey our foundation has been on," Richard Holbrook, Eastern's chairman and chief executive, said. "We're doing research now on ways we think we can make a significant impact."
If Eastern's foundation follows through, it would be punching well above the weight of most community bank foundations, reaching local donation amounts that could surpass those of much larger foundations. For instance, the biggest donations that the Bank of America Charitable Foundation makes to local groups total $200,000, said Kerry Sullivan, the organization's president.
In all fairness, Bank of America's foundation makes much larger donations to national and international causes. The organization, which pledged in 2009 to make $2 billion in donations by 2019, gave away $192 million last year, and it made a $6 million commitment to Habitat for Humanity last fall.
Eastern's commitment is still noteworthy given the size of its existing donations. Its grants even in targeted causes currently top out at $50,000, with an average closer to $5,000. On its website, Eastern describes its strategy as making "many small grants rather than a few large grants."
The foundation is no stranger to targeted giving. Education received 28% of all its charitable outlays last year, more than any other cause, including $1.6 million in grants to programs supporting K-12 education. The foundation also plans to give more than $1 million to anti-violence programs this year.
While Eastern is careful to keep the foundation entirely separate from the mutual's marketing and advertising efforts, bigger allotments could get more media attention.
At the very least, they should send a powerful message, Holbrook said. "It tells our community that Eastern Bank, as an organization, is permanently attached to this region."
The Eastern Bank Charitable Foundation "is going to be very popular" if it delivers on plans to make bigger grants, said Jane Kurek, executive director of the Provident Bank Foundation in Morristown, N.J. (The foundation was founded by the $8.5 billion-asset Provident Financial Services.)
Kurek is in a position to know. Last year, her organization's board completed a review similar to the one being conducted at Eastern. In January, the foundation unveiled a program where it plans to make three $100,000 "Signature" grants this year, one in each of its three funding priority areas: Community enrichment, education and youth, health and family.
The Provident Bank Foundation, which is seeking proposals for the first two Signature grants, has received applications from nearly 80 nonprofit groups, Kurek said.
Provident created its foundation in 2003 after the Iselin, N.J., company raised $586 million in an initial public offering. The company, with a lineage stretching back to 1839 when it was formed as a mutual savings bank, donated $24 million as a start-up bequest.
The foundation, which distributed nearly $1.1 million last year, has made large donations in the past, Kurek said, including a $100,000 grant for a videoconferencing system at the neonatal intensive care unit at the Children's Hospital at Saint Peter's University Hospital in New Brunswick, N.J. The system lets parents, family members and friends see newborn children receiving treatment.
Still, making large-dollar grants on regular basis had never been considered. The results of the Children's Hospital grant helped change the board's thinking, Kurek said, noting that the system's cameras have been accessed more than 150,000 times since their October 2013 installation.
"I think they saw what a large grant can do," Kurek said. "They can help groups do what they do better and change lives."