NEW YORK (6/10/15)--A hallmark of credit unions’ member-owned, cooperative business model is the financial education initiatives that they provide their members. From classes advising people on how to get a good price for an auto or home loan to one-on-one counseling, many credit unions have programs in place.
Financial counseling is a major part of these efforts, particularly in credit unions certified as Community Development Financial Institutions (CDFIs). According to a survey conducted by the National Federation of Community Development Credit Unions, 77% of responding low-income designated credit unions offer financial counseling, and many have substantial in-house individual financial counseling programs.
Most credit unions (55%) who responded serve more than 100 members each year, and nearly half had two or more full-time staff delivering counseling.
But how do those credit unions measure the success of the lessons and ideas taught in these programs?
“Credit unions have amazing stories about ways they can help their members, but there just isn’t much available in terms of quantifiable results,” Ann Solomon, strategic initiatives manager with the federation, told News Now.
Currently, most credit unions gauge their financial outreach success through anecdotal evidence.
“We do conduct surveys and collect feedback after our programs, and what we hear is generally very positive,” said Tom Champagne, director of marketing for St. Mary’s Bank CU, Manchester, N.H. “We’ve held financial literacy events at local schools, community colleges and even a local hospital, and we think they’re effective because we’re invited back and invited to expand the program. There isn’t really a metric we’re able to use to see how well these lessons are sticking with people.”
Most respondents to the recent federation survey said that they do not have a way to track the outcomes of members who receive counseling, but they would like a way to better understand the impact.
St. Louis Community CU has partnered with the independent nonprofit Prosperity Connection to track the success of its one-on-one counseling program. Prosperity helps St. Louis Community CU members with free financial coaching and money management education to help them take control of their finances and work toward their goals.
Dorothy Bell, senior vice president and chief marketing officer at St. Louis Community CU, said Prosperity is working on tracking a number of outreach functions.
“The organization is tracking demographics of its participants, class and coaching attendance,” she told News Now. “Prosperity Connection is also using the program to better track a range of metrics in order to best meet the needs of the communities it serves, such as banked status (banked, unbanked, underbanked), building credit, savings and more.”
The federation has teamed up with Neighborhood Trust Financial Partners for a pilot program called Pathways to Financial Empowerment. The program will allow five credit unions to participate in the 15-month program, where they will test a model to track counseling outcomes, and receive grants to cover the costs.
“We’re aiming to use credit unions to help build a framework that might be able to help us get a good look at the real effects credit unions are having,” Solomon said.
“Our intent is to help credit unions develop a mechanism for permanently tracking the results of their counseling efforts, and by helping them more easily capture information, we think they’ll be in an even better position to shape their efforts going forward,” said Cathie Mahon, federation president/CEO. “Ideally we’ll come away with a platform that will become part of any financial counseling program, without adding a lot of extra work.”
The program would show credit unions different methods for tracking success, including better credit scores, budget success and long-term savings. It would also search for other indicators of success that credit unions might be seeing.
Applications for Pathways to Financial Empowerment are being accepted through Friday.