Funding a Better Tomorrow

A Virginia community banker helps launch an online charity donation portal

By Michael J. Blankenheim

There was a time when over 20 percent of community bank deposits were in noninterest checking accounts. Now, in an age when online banking portals provide customers with the ultimate convenience to manage their funds anytime, that number is down to about 10 percent, says Jeff. W. Dick, CEO, chairman and president of MainStreet Bank in Fairfax, Va. What’s a community bank to do?

“Innovate,” Dick responds. Community banks need to create new products to provide additional sources of low- or no-interest deposits. And that product for MainStreet Bank is aircharity.

Aircharity is a simple-to-use online portal through which people can donate money to individuals and charities both large and small. And it’s social media and mobile device friendly. While other third-party online portal donation services exist, Dick says he believes that MainStreet Bank, a $260 million-asset community bank, is the first bank in the nation to offer this type of product, which also has features other portals don’t.

“This is like a triple win for us,” Dick says. “It gives our customers a way to raise money in a less expensive and social media-savvy way. And let’s not forget we are a bank, and so what we are also saying with aircharity is that we want your deposits in our bank.”

With encouragement from ICBA, Dick is looking to share the product with other community banks. To develop aircharity, it costs about as much as opening a new branch, he says. However, MainStreet Bank won’t attempt to recover the cost of development through sharing the product.

“We are working through the details, and yes, I’d like to make a little money on it,” Dick says, “but I think we can share it in such a way that’s good for everybody.”

Idea inception

About three years ago, Dick was in the middle of his quest for a new deposit product. At that same time, a MainStreet Bank employee’s baby was diagnosed with an illness. Dick, who grew up in a small town, got to thinking that in days past the way to help somebody like that would’ve been to place a fish bowl in the grocery store for donations.

With those days mostly gone, Dick mused to himself: What if we created an account that gave our customers the opportunity to make donations? He and his staff then began pondering the social media aspects that were needed to accompany such a product, and the concept was hatched.

Along the way, Dick hired a talented young social media whiz to shepherd the project and turned to a local IT firm that was a trusted customer to develop the portal. Hurdles to overcome included developing a robust online portal with sufficient security to hold sensitive data and interact with the bank’s core processor.

The result: aircharity is PCI compliant (a credit card processing standard), FDIC insured and Verisign secured. Still in its infancy, aircharity was released late last fall, and about 100 accounts have been opened. “I’d like to be able to report that we’ve already raised millions for charities, but that will come in due course,” Dick says. “Once people can identify with the product, understand both its social depth and its simplicity, and understand the pricing utility—we will have a winner.”

About three new aircharity accounts are added each week. Total transactions are under 1,000 but are gaining momentum, Dick says. For victims of Superstorm Sandy, the bank opened an aircharity account, waived the transaction fees and raised just over $12,000. Charities that have signed up include the American Red Cross, Leukemia and Lymphoma Society, and Boys and Girls Clubs.

Aircharity in action

Each aircharity account provides an online portal for either charities/organizations or individuals to collect donations. (An organization is charged a one-time administrative startup fee of $249.95, an individual $9.95.) An account holder is given his or her own donation widget, which can be posted on his or her personal website, blog, Twitter, Facebook page or embedded into emails and email signatures. The widget allows each account holder to include a graphic or photo, and up to 85 characters of text.

“We can work with customers to help them customize their widgets,” Dick says. “The concept of the widget sets us apart from other donation portals, which only have “donate” buttons. The message that can be placed inside a widget can be the difference in compelling someone to take action.”

Once a giver clicks to give, he or she has the option of donating by major credit card, debit card or electronic check. Next step is keying in account information. There is a third-party merchant service fee that is taken out of each donation. As an example, the fee for a $25 donation is $1.24. Dick says MainStreet Bank’s research shows the aircharity service fee is the lowest of any donation portal. Givers may click to pay the service fee, and so far, about 50 percent have chosen to do so.

Next, a giver is asked if he or she wishes to notify his or her friends about the charity. If so, the system allows the giver to post the widget to a Facebook page or send an email to friends. “We’re trying to create a viral multiplier effect,” Dick points out.

A bright future

Dick notes that he doesn’t have the budget for a large marketing campaign as a larger bank might. Instead, he has promoted aircharity through radio ads and the Internet with the slightly edgy tagline of “Go fund yourself.”

“It’s all right to be a little cheeky and memorable,” he offers.

And Dick also has a not-so secret weapon as a promotional tool: professional football legend and NFL Hall of Fame member Darrell Green.

Green, who played for the Washington Redskins football team for 20 years, is one of the most popular athletes in the Washington, D.C., region where MainStreet Bank is located. Green was an organizing shareholder of the bank when it was formed in 2003 and now sits on its board of directors. He appears in several of the bank’s aircharity videos and has promoted the product in other venues.

“This is about bringing community values to people, which is exciting to me,” Green says. “When I promote this product, there’s no big selling point involved. I don’t have to dance. It sells itself. It’s real, it works, and it’s practical.”

Dick says aircharity helps position MainStreet Bank to compete against the products offered by the largest banks and addresses the bank’s long-term strategic goals in a significant way. “This has the potential to be huge for us. If we could get that viral impact with it, if we can get people to really go with it, then we have the potential to lower our funding base.”

Michael J. Blankenheim is a writer in Bowie, Md.