Measuring the Impact of Credit Unions on Wealth Building in Communities: Preliminary Findings on the Impact of Affinity Credit Union’s Community Investment Programs

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Date
2015-09
Authors
Hammond Ketilson, Lou
Gordon Nembhard, Jessica
Taras, Victoria
Hewitt, Myrna
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Publisher
Measuring the Co-operative Difference Research Network
Abstract
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Many scholars and co-op practitioners believe that successful co-operative businesses benefit their communities and help their members accumulate wealth and/or assets. We applied this notion to credit unions and explored whether they provide unique measurable benefits to stakeholders. In addition, there is concern about the growing similarities between co-operatives and their private sector counterparts. Co-operatives should be uniquely attentive to local community and individual needs because of their democratic structure and because they operate using a set of principles that stress equity, participation, self-reliance and transparency. One way to measure the cooperative advantage is to evaluate co-ops’ adherence to the internationally recognized co-operative principles (Rochdale Principles). This study aimed to document and measure the impacts of credit unions' programs and services on members’ well-being, financial stability, wealth-building, skill development, civic engagement, and overall community economic development. We began to identify and test a set of traditional and nontraditional economic and social indicators that would increase our understanding of the broad impacts of credit unions on their local economy, including impacts that circulate multiple times. We partnered with Saskatchewan-based Affinity Credit Union to test the proposed indicators. We also explored community impacts more deeply by measuring how much Affinity adheres to this principle through their five community investment programs: 1. the Individual Development Account (IDA) program, 2. the District Council funding program, 3. the Community Loans program, 4. the Microloans programs, 5. the Accessible Housing programs. A focus group, a telephone survey, and in-person interviews were conducted with individuals who benefited personally or as part of an organization as a result of the community investment programs. Although the study is ongoing, our preliminary findings show that Affinity demonstrated important or differential impact on most of the indicators. We found that programs targeting lower income and/or vulnerable members of communities were helping member to feel more empowered, to access services they would not obtain from other financial institutions, and to move toward achieving their financial goals. Interestingly, many (especially higher income) members felt that their credit union should be doing even more to support community well-being. This phase of the study demonstrates that Affinity does adhere to the seventh Rochdale Principle, concern for the community. And although it has not lost its co-operative advantage, it must remain vigilant to maintain it. Along with the paper, this entry contains a copy of the presentation made at CASC 2016 in Vancouver.
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