Best practices: Community impact

For love or money

With different motives, five firms affect their neighborhoods

by Elizabeth Martin   The five finalists for Best Practices in Community Impact have different definitions of “community.” For some, their community is their neighborhood; for others, it’s halfway around the world.They share a commitment to making a difference, some purely for philanthropic reasons and some as an integral part of their business plan.The Authentic Tibetan Rug Co. in Minneapolis works to support those in need halfway around the world, in Tibet. They’ve chosen a cause that directly affects their business. Five percent of all of the company’s sales go to the Tibet Vision Project, a charitable organization dedicated to developing Tibetan ophthalmology programs to treat cataracts, which is the No. 1 cause of blindness in that country. “I’m a big believer in ‘teach the people to fish,’ ” says Kathy McKay, co-owner. The Tibet Vision Project’s goal is to train Tibetans to treat their own people for cataracts, rather than relying on foreign physicians.On a visit to Tibet in 1999, McKay met a rug maker who was already exporting to Germany and Korea and was selling to tourists in Nepal. McKay developed an agreement with the rug maker to import her rugs to the United States and began selling them here in 2000. “We continue to be impacted by the Tibetan people we’ve met in various ways, and we became aware of the Tibet Vision Project in the past year,” says McKay. “Because of the high altitude, blindness is more prevalent among the native Tibetans.”The project was founded by two physicians in California whose primary goal is to train Tibetan doctors to treat blindness, but the physicians themselves also return to Tibet twice a year to continue training nurses and doctors in cataract surgery.McKay says that her philanthropic efforts with the Tibet Vision Project set her apart from her competition, as does the fact that her rugs are made inside Tibet. To her knowledge, The Authentic Tibetan Rug Co. is the only store in the Midwest that sells handmade rugs made within Tibet. “In the hand-woven rug business, there may be some issues with child labor,” she says. “That’s never been an issue in Tibet.” Outreach is businessCommunity Reinvestment Fund USA in Minneapolis is in the business of bringing capital to public and nonprofit community development lenders. On Greer’s spectrum, Community Revinvestment Fund lands on the money side: community outreach is the organization’s business.When banks say no to prospective borrowers, they frequently must turn to an economic development agency. “Those kinds of organizations, at some point, run out of money,” says Warren McLean, vice president of development with Community Reinvestment Fund. “If they’re an economic development agency, they have to go back to the state or to the city to give them additional appropriations. Or if it’s a nonprofit, they have to go back to a foundation. “What we do is we say, instead of going back to the government for money or instead of going back to the foundation for money, we will take the loans that you’ve already made, and we’ll buy them from you. By buying those loans from them, we recycle the capital that they’ve already put out.” Community Reinvestment Fund has done close to $500 million in these types of transactions and has helped 20,000 families through this type of support, says McLean. “We exist to support the mission of our lending partners,” says McLean. “We don’t go in and say, ‘You need to do this, you need to create jobs, or you need to do affordable housing.’ We say ‘What is your mission, we’ll get behind you, we’ll find a way to lend or support you to help you complete what you want to do.’“We try to find every way to do a transaction, to find a way to get to yes,” says McLean.What’s your motive?When the mother of a high-school friend died of diabetes, Ken Greer and his friends wanted to “do something nice for her.” So, they held a tennis and golf tournament to raise money for diabetes research. It made Greer feel good, so he decided to do it again the next year. And the next. “It got to be so much a part of my personal DNA, that when we formed the company, it became part of the corporate DNA,” Greer says.Over the past 20 years, Greer & Associates, the advertising agency in Minneapolis,  has donated over $30,000 in time and services to this event annually. Today, the Joan Soskin Memorial Diabetes Classic is the largest fundraiser in Minnesota for the American Diabetes Association. In fact, it was the American Diabetes Association itself that nominated Greer for the Upsize Business Builder award.Greer, whose business card reads “Fearless Leader,” is philosophical about community outreach. Companies that want to get involved in giving back to the community need to be clear about why they’re doing it, he says. Be clear about whether your company’s efforts are purely altruistic, or if you are hoping to achieve financial gains for your business. Neither motivation is bad, he insists, but companies need to know whether their efforts are for love or for money. Just be sure everyone involved is clear about why the company is promoting the cause.“If you’re involved in a commercial enterprise, that’s how you need to think of charitable giving,” says Greer.  “When you mix the two, I think the message becomes convoluted and your mission becomes unclear and you really can’t do the types of things that you should be doing,” he continues. “In the case of Greer, money did not matter.” Teaching about creditTopline Federal Credit Union in Maple Grove has developed financial education seminars that focus on credit education for families working with the Community Emergency Assistance Program (CEAP). In addition, the company has encouraged employee enthusiasm for toy drives, back-to-school supply drives and recently began volunteering to rake the yards of homeowners who cannot do it themselves. Ronda Bandy, the credit union’s marketing manager, says that two keys to a successful community outreach program are: champions within your organization who promote the cause and good communication.“You can’t tell your employees too much about it,” says Bandy of community outreach efforts. She adds that when employees spend time together outside the office, the payoff reaches back into the workplace.“I think we’ve all gotten to know each other a little better. When you’re out raking leaves with someone, you might get to know them in a little different way than if you are sitting in the cube next to them.”         

Doing well, doing goodUniversity Bank in St. Paul is building its business by seeking customers who want to invest in their community.When University Bank’s customers open a new account, they can opt to invest their deposits in the bank’s Urban Revitalization Fund. Bank President David Reiling says this approach has benefits for both customers, who receive a competitive interest rate on their deposit accounts, and also the surrounding community. Money from the Urban Revitalization Fund is used to support affordable housing, small businesses, nonprofit organizations and community services in areas of the Twin Cities that meet the bank’s criteria for being “economically challenged.” University Bank puts 70 percent of its loan portfolio into economically challenged neighborhoods. Reiling says the bank has attracted deposits from organizations all over the country that are looking for ways to align their business practices with their values. “You can do well and do good at the same time,” Reiling tells the audience. “They’re not mutually exclusive.”[contact] Ronda Bandy, Topline Federal Credit Union: 763.391.0874; rbandy@toplinecu.com; www.toplinecu.com. Ken Greer, Greer & Associates: 612.338.6171; kgreer@thinkgreer.com; www.thinkgreer.com. Kathy McKay, Authentic Tibetan Rug Co.: 612.377.5800; kmckay@tibetrugs.com; www.tibetrugs.com. Warren McLean, Community Reinvestment Fund USA: 612.338.3050; warren@crfusa.com; www.crfusa.com. David Reiling, University Bank: 651.265.5656; david@universitybank.com; www.universitybank.com