An Incentive For Purpose, Not Personal Gain

Affinity Plus Federal Credit Union redirects incentive payouts on ancillary loan services to contribute to foundation funding.

Many a credit union foundation ensures its ongoing financial stability through donations, grants, and fundraising. Some foundations also lean on their own diversified investment strategies; others leverage their affiliated credit unions for funding.

Affinity Plus Federal Credit Union ($2.2B, Saint Paul, MN) taps an altogether different source to support its two-decade-old Affinity Plus Foundation. Although legally defined as a vendor contribution, the credit union routes the incentive payments generated from ancillary product sales to its foundation. In the wake of national and local scandals, such as Wells Fargo’s fake accounts and TCF Bank’s Overdraft yacht, eschewing performance incentives in favor of foundation contributions is a public display of the premium the credit union places on incenting its purpose, says Kristina Wright, board chair of the Affinity Plus Foundation.

In this Q A, Wright, who is also the senior vice president of member experience at Affinity Plus FCU, discusses how the credit union arrived at the idea to use incentive payments to fund the foundation, how the concept works in practice, and advice for credit unions looking to fund a foundation.


Where did you find startup capital for Affinity Plus Foundation?

Kristina Wright: Initial funding for the foundation was made by the credit union, and it continues to pay the salaries and benefits of foundation employees.

How does the credit union ensure the ongoing financial stability of the foundation?

KM: The credit union is an important donation source for the foundation. One of Affinity Plus’s branches is located near the University of Minnesota. During Gopher football games, we sell space in the parking lot. That brings in about $10,000 each year. Because it is credit union land, the funds must come through as a contribution from the credit union, but everyone who parks in our lot or buys a season parking pass knows they’re making a contribution that gets directly passed to the foundation.

You also take incentive payments that would otherwise go to front-line staff for selling ancillary products, such as insurance, and donate that to the foundation. When did that start?

KM: Around 2010, when we switched warranty providers. Rather than providing individual product incentives for employees, we agreed the partnership would support our mission and the mission of the foundation.

In our annual budget, the foundation considers this a vendor or partner contribution versus a contribution from the credit union. Instead of the warranty provider paying the credit union’s employees $25 per warranty sold as an incentive payment, we’ve contracted with it to contribute to our foundation in these instances.

Why did you structure it like this?

KM: We don’t provide individual incentives based on products at Affinity Plus — some credit unions do and some don’t. This vendor partner said it typically pays out incentives for warranty sales. We said we didn’t want the money in that way and that we’d prefer it be a contribution to the foundation. By doing it this way, we’re incenting our purpose and not our employees.

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And there’s no ill will from employees?

KM: Our employees are excited about our foundation. Giving to it contributes to employee culture and shows our desire to give back to our members and communities. They love what it does. We provide college scholarships, community grants, and financial education to improve the communities in which Affinity Plus has a presence.

We inform employees during our lending training of the support the foundation receives from warranty sales which has been $10,000 to $15,000 per year in recent years and they know every warranty they sell contributes to our foundation. Characterizing it as an employee incentive doesn’t feel right. It’s more an incentive for doing business the right way.

What would you say to a credit union seeking advice about funding a foundation or ensuring financial stability?

KM: Have a clear purpose on what you want to support. For example, through our foundation we support financial education initiatives and community initiatives that strengthen the communities in Minnesota where Affinity Plus has a presence. Whether supporting focus areas or something else, have a clear purpose and be able to circle back and show how your efforts and dollars have been spent and the difference they have made to that purpose.

This interview has been edited and condensed.

October 8, 2018

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