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Not for Profit, Not for Charity ... An Emphasis on the Latter

Steve Delfin found himself on his way out just about the same time that much of what he had preached was finding its way in.

Delfin, who stepped down at the beginning of this year as executive director of the National Credit Foundation in favor of taking over another non-profit, had long advocated that social responsibility can be a growth strategy, and shouldn't be viewed as some sort of charitable giveaway with no ROI. That's a mindset that as we enter 2010 has begun to find a toe-hold in the thinking of more credit union leaders.

Case in point: the REAL Solutions program. REAL Solutions, which is one of two programs Delfin said he is most proud of during his tenure at the NCUF, works through state credit union leagues to help credit unions successfully provide proven, new products and services to underserved communities. In short, the program shows there are bottom line benefits to be had by the credit union for doing bottom line good for low-income members. REAL Solutions was created by the Filene Research Institute, which shopped it around for a while before the Foundation agreed to take it in.

"When we took it on in 2007 there was a lot of skepticism," said Delfin. "People equated it to another Project Differentiation. The board said, 'If we're going to go for it, then let's really go for it,' and we set some aggressive goals. Hiring Lois Kitsch (to lead REAL Solutions) was the smartest thing I've ever done since I was born, other than marrying my wife. The potential is here for Real Solutions to be a rallying point for advocacy. I think credit unions are sitting on an opportunity that is absolutely spectacular."

Delfin said data now show that 20% of the assets in the credit union movement are in REAL Solutions, which now operates programs in 37 states. Delfin acknowledged that in the past when there was debate over serving the underserved it included "contentiousness and bifurcation." But now, Delfin noted, you have "credit unions telling you what they are doing and telling the story. Lois made that happen."

The second development of which Delfin said he is most proud is the growth of the Development Education (DE) program (full disclosure here, as I am a DE, which does not, as one former employee suggested, stand for Dumb Editor). The week-long Development Education program is sometimes derided as Philosophy School, but for most it's a battery recharger, with graduates tasked with promoting cooperative principles and credit union values as distinct advantages in the marketplace. The Foundation sometimes refers to DE as the "why" and REAL Solutions as the "how."

"I think we've taken it to another place," said Delfin. "There are not just the two programs per year, but it's also now much more practical on how to leverage opportunities around social responsibility. That still doesn't get the credibility it deserves, but the operational connections are being made. It's not just about doing good but about doing these things and applying it at the credit union and putting that into play and bringing it back to show the ROI on the (DE) training."

That's also been a core goal of the NCUF's Social Impact Training where "we try to connect senior management with this," he added.

Although he's departing the Foundation, Delfin is hopeful credit unions will not miss what he sees as an extraordinary market opportunity in the years ahead. "Banks have just shot themselves in the foot," he observed. "Most of our primary characteristics play right into what consumers are looking for, and we are not taking advantage of that as a brand."

That departure has nothing to do with what Delfin acknowledged that 2009 "was our worst year for fundraising."

"That was the bad news. But the good news is our reserves are up as we've managed expenses and planned for this. The corporate (CU) problems have hurt us, but the low interest rates have hurt more. We are well-positioned to weather this."

It seems almost required to ask those leaving leadership positions about their "legacy," so I asked Delfin about his at the NCUF.

"People believe in the Foundation. I think we have taken it to a place of higher respectability," he said. "We have built a core competency out of social responsibility. I hope my legacy is in pushing through the value of all this; that we are not viewed as a charity but as a growth strategy. There are three types of people: the progressives who see the value of NCUF; there are those who are progressive but skeptical, and there are the skeptics-those who just those who don't believe in social responsibility, the same as they are in the business world. I have focused on the first two-thirds.

"When I arrived the NCUF viewed as an organization that made a lot of grants but did not have a lot of impact," he continued. "We made donations because it was the right thing to do. In 2004 Filene pitched REAL Solutions to us but the board did not want to make the leap. When we revisited it I said I believe foundations are about being innovative and taking risks, even if sometimes those fail."

Delfin, whose departure leaves the Foundation without its top two execs, as Steve Bosack had departed earlier to join NCUA, knows there has been "bad timing," but he felt he couldn't pass the opportunity to join America's Charities. Delfin has spent his career in fundraising, with 11 years at United Way and four more at the American Red Cross. America's Charities is a federation of 80 other national charities that do much of their fundraising in the workplace. Delfin had been board chair at America's Charities when its CEO left and a search was launched. After being approached by other board members about the job, Delfin said he threw his hat in the ring. That hat landed back on his head.

"I think I am well suited to be effective there," he said. "I intend to stay engaged in credit unions, including in workplace philanthropy. I feel like it's my calling."

Whomever succeeds him at the Foundation, Delfin believes will find a receptive, albeit skeptical, CU movement for the NCUF's message. He feels it will be especially true as there is greater weight on CUs to prove they are worthy of the federal tax exemption.

"With some form of CRA possible, there is tremendous value in demonstrating these things to consumers," said Delfin. "We can take what you're doing to help you in a social audit or social responsibility report. This is important because in the new environment of accountability and transparency that will be heightened as a result of the financial crisis, credit unions need to look at this as a competitive advantage, not a burden."

There is another point that credit unions, tripping over themselves to capture Gen X and Y and all those behind them, must realize. "If you call it a credit union, a lot of young people may not get it," noted Delfin. "But if you describe it, they get it. That's what we must try to do with our brands."

Frank J. Diekmann is publisher of Credit Union Journal and can be reached at fdiekmann@cujournal.com.

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