As one of the largest credit unions in the state of Vermont, VSECU (Vermont State Employees Credit Union, $1.1B, Montpelier, VT) supports a range of groups and projects to improve the lives of the members and communities it serves. To elicit member feedback and encourage their involvement in the decision-making process, the credit union employs a democratic process to direct some of the funding.
Under its member-directed We Care 2 program, VSECU donates $50,000 a year to five nonprofit organizations that provide for the essential needs of people, which VSECU defines as food, shelter, heat, financial literacy, and a sustainable environment. Organizations apply for grants, and VSECU selects five to receive funds. To determine how much each finalist receives, however, the credit union asks members to cast votes during its annual meeting in March.
“Everything we do at VSECU is based in values and, really, based on the community impact idea,” says Simeon Chapin, community impact officer at VSECU. “The cooperative principles are in our DNA, and we’ve layered this idea of sustainable banking on top of that strong foundation. Both of those principles guide how we make choices, how we do strategy, and how we measure our own performance.”
Last year, members directed funding to a community group that provides emergency aid for food, fuel, and primary medical care, a recovery center to combat substance use, a group of youth and adult volunteers who provide basic housing repair services, an emergency shelter for survivors of domestic and sexual violence, and a support group for the resettlement of refugees and immigrants.
“The fact the gift came directly from our neighbors, friends, and supporters at VSECU is a great testament to the community support of refugee resettlement,” says Amila Merdzanovic, director of U.S. Committee for Refugees and Immigrants Vermont.
CU QUICK FACTS
DATA AS OF 09.30.22
HQ: Montpelier, VT
12-MO SHARE GROWTH: 12.0%
12-MO LOAN GROWTH: 7.6%
The agency, formed in 1980, has found new homes for more than 8,000 refugees from war-torn countries such as Bosnia, Iraq, Sudan, Somalia, Syria, and Vietnam. VSECU has played a role in providing financial education, credit advice, and translation services. Several refugee families have even joined the credit union.
“Vermont is generally welcoming to new Americans, who bring so much to our state,” Chapin says. “Currently, the refugee resettlement community is preparing to welcome Afghan refugees who are looking for a safe place to be.”
Hunger relief is another major thrust for VSECU. Since 2018, VSECU has been the lead sponsor and producer of Point to Point , a charitable cycling and running event that raises funds and awareness for the Vermont Foodbank’s mission to fight hunger. The credit union offers employees eight hours a year of volunteer time off to support this event or to participate in other volunteer opportunities in their community.
Home Heating Fuel Discounts
In addition to its community service efforts, VSECU also offers a program called VHeat exclusively to members. Through the program, VSECU partners with several participating fuel dealers for a variety of home heating fuel types to make heating homes and businesses easier and more affordable. Last year, 2,700 members enrolled in VHeat, each saving an average of $343 on their heating fuel costs. The program added up to nearly $1 million in savings in 2020 and $3.3 million over the past four winters.
“We’ve been able to leverage the power of a membership organization to create lower fuel prices,” Chapin says. “That’s money in everyday Vermonters’ pockets to spend on other things that help make their lives better.”
VSECU entered the fuel-buying business when it bought a cooperative group, then expanded the service statewide by bringing in new fuel dealers. Through VHeat, members receive regular fuel deliveries on an automated, convenient, hassle-free schedule. A payment system automatically debits fuel costs from participants’ accounts after each delivery. And just in case a program participant has insufficient funds in their VHeat Clearing account, the credit union automatically covers the amount due via the VHeat Credit Line overdraft protection.
“It’s a win-win for everybody,” Chapin says. “Members get a lower cost on their fuel and guaranteed warmth. The fuel dealer gets a guaranteed market.”
Investing In The Cooperative Movement
VSECU invests in cooperatives to support local communities through a program launched in 2016 called Co-Op Capital . Vermont state law allows state-chartered credit unions to invest directly into other credit unions and cooperatives both inside and outside of Vermont.
The statute enables credit unions to invest equity of up to 10% of their shares, deposits, and surplus into cooperatives, without counting against the 12.25% business lending cap. Investments generally take the form of preferred stock, non-voting shares that can pay a dividend.
Since the inception, Co-Op Capital has invested $148,000 in a worker-owned cooperative herbal clinic , a startup commercial hydroponic greenhouse , and, most recently, the Springfield Food Co-op. A community staple in Springfield, VT, for more than 25 years, the Springfield Food Co-op last year expanded in a new downtown location on Main Street that offered more shelf space, community space, and outdoor seating.
The move cost more than $700,000. The co-op’s 2,300 members, a local community development group, and the private sector funded the venture, but one key investment of $125,000 came from VSECU’s Co-Op Capital fund.
Cooperatives, especially food cooperatives, source from their local communities, the local farmers and serve the local people, Chapin says. That’s really why we have this interest in supporting them.
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VSECU also provides direct donations and grants to community partners. For example, it helped a community group launch a seed capital fund with a $15,000 donation for solar development. As the money is repaid into the fund, it can be used for other community projects. VSECU has already provided funding for homeless youth programs, a homeless shelter, and an incubator program for startup companies serving the energy efficiency market.
The best experiences we’ve had are when we’re able to do more than just make a donation and are able to actually partner with that organization, Chapin says. If we can bring either community volunteer staff or any kind of a loan capital to that program, then we’re able to leverage more of the credit union’s ability.
This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about VSECU or dive into a decade of archives. Contact Callahan to learn about gaining access today.