A Federal credit union is a cooperative association organized for the purpose of Nothing could be simpler. From the beginning, credit unions have been explicitly purpose-driven.
Having a clarity of purpose specific to their membership and a commitment to doing business with that purpose as their priority has never mattered more to credit unions than it does today. Extensive research shows that purpose motivates employees, differentiates in the marketplace, drives better financial performance, and delivers meaningful outcomes for member-owners and their communities.
What’s been missing in the credit union industry is a shared understanding of how to illustrate the impact of purpose. We at Callahan believe anything that allows you to observe, measure, and act upon your purpose is an impact metric, so we are building an interactive data set to capture and analyze impact metrics.
Callahan & Associates has compiled more than 40 formal impact reports issued for 2020 by credit unions ranging in size from $30 billion in assets down to $30 million. These reports document how these credit unions delivered on their purpose; no doubt thousands more talked about their own purpose and impact at annual meetings, in press releases, in front of regulators, and through their advertising.
This embrace of impact is a huge step forward in showing members and the rest of the country that credit unions are not just socially and commercially valuable financial institutions, they are invaluable American community partners.
Over the next couple of weeks, some of my colleagues will introduce Callahan’s commitment to helping our industry take the next step on our collective impact journey one that involves measurement and reporting.
We’re doing this for many reasons, but three deserve special mention:
- Impact is a measure of performance. Like with financial metrics, impact metrics empower the credit union industry to identify best practices, share success stories, and learn from one another. But this works only if we establish standards for impact measurement, collect the data, and make it available on an analytics platform. That’s what Callahan delivers with 5300 data; we intend to build the same industry asset with impact data.
- Unless credit unions commit to measuring their impact to consistent standards and sharing their results with one another, then each credit union has to tell its impact story on its own, without any context to illustrate the depth and breadth of credit union impact relative to the performance of for-profit competitors.
- Most important to paraphrase Peter Drucker if something isn’t measured, it doesn’t matter, doesn’t get done, and in the eyes of skeptics, may not even exist. Impact always matters to the doers and the beneficiaries, but measurement and reporting make impact real for everyone.
Of course, impact doesn’t mean the same thing to everyone. Each credit union has its own purpose, so we won’t be imposing a strict definition of what impact is or what it isn’t, and we’re not creating some perfect impact score. To be meaningful, impact must reflect each unique credit union’s community and membership base. When it comes to impact, one size cannot fit all. That’s why Callahan is working with credit unions to frame a descriptive definition that reflects every credit union’s success at living its purpose.
We’re doing this by creating a network of credit unions that believe the impact they have is worth tracking and measuring.
Thus far in our journey, we’ve learned some things from Callahan’s Impact Network members that might surprise you. For example, every credit union is already measuring impact, whether it knows it or not. Credit unions already track most of the data we’re collecting in this initial phase of our initiative. And the process of locating the data to set up automatic reporting triggers engagement, conversation, and excitement among team members. All you have to do to participate in Callahan’s Impact Network is locate your data, gather it up, and submit it and we can help with that.
We’ve also heard from many credit union leaders that they don’t think they’re doing enough compared to their peers. They are wrong. Across the industry, credit unions are doing more, having more impact, measuring it better, and telling the story better than they think they are. This means Callahan has a strong base on which to build an impact performance comparative analytics and benchmarking platform. Keep reading in the coming days to learn more. Then please join us.
Callahan & Associates created the Impact Network to empower credit unions to better articulate their value through a mission-focused lens with the help of new metrics and best practices. The Impact Network is growing every day. Join the network today, and help evolve the credit union story.