How 1 Foundation Tackles 2 Mandates

Like many cooperatives, Excite Credit Union (San Jose, CA, $708.2M) has an established reputation for giving back to the communities it serves. It partners with other local non-profits, cooperatives, and schools; it offers tangible initiatives to help anyone build wealth; and it offers affordable financial services and products designed to improve the economic mobility and wellbeing of its members.

In November 2020, however, Excite took its efforts to the next level. Formed and incubated during the pandemic, the Excite Foundation is now taking the credit union’s impact to the next level. 

“As a trusted community partner, we wanted to be in a position to facilitate donations to address natural disasters and other unexpected events,” says John Hogan, vice president of community relations for the credit union. “You need a vehicle in place before a disaster occurs to marshal the resources and good intentions of members and neighbors, who are anxious to rally together to help.”  

From fires in its northern California market to hurricanes and floods in its North Carolina market, Excite and its members have plenty of opportunity to support those facing unavoidable destructive events, and now, the credit union has the infrastructure in place to facilitate tax-deductible donations. But in addition to aiding those in the path of Mother Nature, the Excite Foundation also aims to build a savings culture and college-going mindset among children. 

Through its Step Up Savings Account, Excite offers a generous 5.0% APY on balances up to $2,500. It also provides the initial deposit for the account and matches up to $25 in deposits each year. The goal of the program is to accelerate savings and make higher education more affordable for young low-income community members. 

Now, the Excite Foundation is helping the credit union expand its efforts to help young people save for college. Through its College In My Future program, the Excite Foundation recently opened college savings accounts for 625 first-graders in Franklin-McKinley School District. The national movement to partner with local schools and create auto-enrollment college savings programs is growing; for its part, the Excite Foundation plans also to expand its impact to support children and communities throughout its California and North Carolina market areas. 

Modeling a program after San Francisco’s Kindergarten to College (K2C) child savings account, Excite pulled together three pieces of the college savings puzzle: a local nonprofit, a financial institution to hold the funds, and a partner, such as a school district, that can access the children and auto-enroll them in the program.   

In some cities, a municipality runs these programs; in others, nonprofits take the lead. Through the Excite Foundation, Excite credit union has the ability to donate to the initiative; however, other community members and partners can, too, including two local banks.  

With a dual mandate comes dual measures of success. On the disaster side, the foundation will judge its success by the number of people beyond the credit union that engage and contribute to relief efforts. On the savings side, measurements will focus more on recipients of the foundation’s support and, in the long term, what happens as those kindergarten participants prepare to head off to college. 

“If people are beginning to save, attending financial literacy classes, learning about the FAFSA, and changing their mindset, that’s success,” Hogan says.  

The foundation plans to conduct parent surveys before launching a cohort, then check in to see if or how their responses change after a year or two of program participation. By asking whether parents think their child will attend college and other pertinent questions, Excite will be able to track how its work is impacting mindsets.  

“Unfortunately, in certain segments of our community, parents tell children not to get their hopes up because they don’t think they’ll be able to afford college,” Hogan says.  

But when parents and children begin to think about college as early as kindergarten and become engaged in long-term college planning, these hurdles are easier to overcome, Hogan says. It’s not just about the savings.  

Ensuring students take the right classes as they move through middle and high school is also critical, as is looking at benchmarks for college enrollment.  

“Schools also are having these conversations,” Hogan says. “But knowing the community and their credit union is behind them and helping provides a new energy for these students.” 

For credit unions thinking about forming a foundation, Hogan says there are multiple paths to consider both from an IRS/structural perspective and a strategic one. One of those paths is to not form a foundation at all. For example, to simply pass-through direct donations from the credit union, a foundation isn’t required. For Excite, however, the work required to create a separate foundation with its own officers and board enhanced the cooperative’s ability to reach more children and act as a community donation hub in times of disaster. 

“Knowing why you’re doing it is key,” Hogan says. “We were clear about why we needed a foundation and what it would mean to create it. We have two core programs that require a non-profit entity. It’s a fit for us because our community relations work is a major focus.”