At the center of StonehamBank’s corporate values is a pledge to donate 10% of profits to community organizations. The community bank’s efforts to give back have given it a socially conscious reputation in its communities.
By Eric Best
Making donations and writing big checks are things that all community banks do. But StonehamBank has made a lasting pledge to charitable giving.
For the past decade, the $610 million-asset, two-branch community bank in Stoneham, Mass., has formally made what it calls the Optimum Pledge, a commitment to give up to 10% of its profits back to the community. The pledge has its roots in the bank’s beginnings; it has been an engine of economic mobility in eastern Massachusetts and southern New Hampshire since its founding in 1887.
“This was a shoe factory town, and there was not a lot of homeownership,” says CEO Edward Doherty Jr. “Our mission became a way to provide people in the area with a way to buy homes. The same principles of service, excellence and trust continue to be at the core of what we do here.”
To organize the process of donating many thousands of dollars each year, a committee of StonehamBank employees receives funding requests, researches new organizations and underserved groups, and then makes donations. The community bank has an informal mission to serve three categories of need: seniors, such as local care facilities and groups dedicated to thwarting elder financial abuse; children, such as schools, spelling bees and reading programs; and financial literacy, because there’s a considerable demand. Doherty wagers one in two customers don’t know what it takes to save for retirement.
There’s also a framework of focus areas to further guide StonehamBank’s charitable giving. These areas include affordable housing, community service, economic development, financial stabilization and underserved groups. Of these, the bank prioritizes organizations that are either local or have some sort of connection to its 18-city community in the greater Boston metro. “We really tried to put some structure to the [charitable giving] program,” Doherty says.
But local needs change, he says, and so StonehamBank’s approach does, too. For example, when the Spartans football team at Stoneham High School won its first state title, the Division 6 Super Bowl game in December 2018, the community bank presented players with their own Super Bowl rings.
Attracting the next generations
StonehamBank’s efforts have touched hundreds of organizations over the years. In fact, when it marked its 130th anniversary in 2017, charitable giving was at the core of the celebration. The community bank gave $130 each to 130 local civic and charitable organizations, from food pantries to scholarship funds, during a period of 130 days.
Even with—or because of—StonehamBank’s consistent giving over the years, it receives up to 30 requests for donations each month, says Doherty. With so much need, it has to turn down some requests. However, its goal is to do the most good. “We know that to really make a bigger impact for the organizations that we’ve been [supporting] for years, we have to say no [to some],” Doherty says. “[Community] banks are so vital in the areas they serve, and it’s very difficult to say no.”
StonehamBank’s focus on giving has become an integral piece of its internal culture. Doherty says employees donated roughly 1,900 hours of their time in 2019—much of it on bank time—to senior centers, schools and other charitable partners of their choice. In fact, StonehamBank has a program in place that pays employees bonuses when they spend several hours volunteering. “Not only do we encourage [volunteering], we also reward employees,” Doherty adds.
“Not only do we encourage [volunteering], we also reward employees.”
—Edward Doherty Jr., StonehamBank
A culture of caring has attracted young people who want to work at a socially conscious business that offers them not just a job, but also a way to help others. “[Young people] want to be able to align themselves with an organization that cares,” Doherty says. “Where we’ve been successful, and where we’ve gotten feedback, is that when they look at our website, they see that the way we conduct ourselves aligns with what they think they’d like to [see in] a future employer. It’s a recruiting tool. It’s a retention tool.”
While StonehamBank doesn’t do much shouting about its charitable efforts, Doherty says the community bank’s reputation precedes it among customers and community groups.
“We don’t market around it, because people recognize what we do,” he says. “We’ve been doing this for 130 years, and if you think for a second that we have plans to stop doing this for another 130 years, you’re crazy.”
Eric Best is deputy editor of Independent Banker.