The local food bank is having an event this month to raise funds, awareness, stocks, etc. They are asking for volunteers to help with the event doing everything from sorting donated stock to overseeing children's activities. I've been asked if sending employee volunteers to staff the event can be used as CRA service hours if we offer comp time (since the event is on a Saturday) to those who go.

By offering comp time, I can see where this would be similar to sending staff on bank time and using those hours....but the whole 'outside bank hours, on their own' thing is making me wonder if this would be usable or not. I think I'm not saying this well. I had it fairly well drilled into my head during our last exam that any activities participated in by bank employees *on their own* (i.e. not on behalf of the bank) could not be counted in any way, shape or form for CRA. I get that.

I guess what I'm asking is would offering comp time and the fact that I'd be coordinating the employees who do volunteer make this count as 'on behalf of the bank?'

The first thing you need to keep in mind is that when counting volunteer hours, the assistance your staff provides must be financial in nature. I don't think you are going to get credit for sorting food and overseeing children's activities as they are not financial in nature. I often use the Habitat for Humanity example when training my staff. Swinging a hammer for them will not get us credit, but being the Board Treasurer will.

Back to your original question, our activities are always coordinated by the bank or during bank time. I have never had examiners question whether or not an activity was "on behalf of the bank" so I don't know if I'm of much additional help there.

We've been allowed to use 'bank time' volunteer hours for this sort of thing as service equivalents to donations before. While it's true serving on the Board in a financial capacity meets the letter of the CRA requirements better, our exminers have historically understood that this sort of activity provides more 'real' benefits to the community groups being served.

Wow - we would never get credit for that, regardless of how "real" the benefit is to the community.

Did you see the part about we have to go the long way 'round and count the work hours used as a donation?

No, I missed that - thanks for pointing it out.

I have never heard of that approach but I could see where it would make sense. I would be very skeptical that it would fly with my examiner, but may just have to give it a try. Are you an FDIC bank?

FRB

I've actually given up trying to sort this one out and emailed the question to them. I keep getting hung up on "but it's a Saturday." We usually only try to count things that were actually done on company time.

I don't think it would work with the OCC. Converting comp time into a psuedo cash contribution -------- that would be an Investment Test credit, not Service Test...

but my examiners would toss either request for credit...

Not to change the topic, but how do y'all meet your service test requirements without being able to use these sorts of things? Short of having an employee sitting as the Treasurer of every charitiable organization in town, I just don't see any good way to do it.

On a personal note, I don't actually understand how having an employee sitting as the Treasurer of a charity board directly benefits the low-income community....but maybe that's just me.

Well, the organization could not function without the expertise of the Board Members who direct it. And, the organization needs to benefit or target LMI's. I think what you are getting at, and I agree, is that there are many more hands-on things we could be doing that would provide direct benefit to those individuals, but unfortunatly it doesn't get us credit for CRA.

I had it explained to me once that we have to remember anyone can swing a hammer, but not just anyone can provide the finanical expertise needed to assist LMI's and possibly help turn their situation around.

We have several staff members that serve on Boards for many community organizations, low-income housing complexes and other non-profits. Another way we get credit is by teaching financial literacy courses to low-income individuals (including children/schools). That is more of the direct benefit that I think you are looking for.

No you are right royal rider! logic cannot be applied to all things CRA, shoot, no things CRA!

CD services must have a community development purpose. So I require my bankers to get verification that their participation in an event, activity or program has a primary purpose CD, or their activity has faciliated the general operations of an organization with a primary purpose of CD.

I make them explain how their role utilized their expertise in financial services.

I have been told board memberships are viewed more highly than single event or programmatic events when reviewing CD Service credit.

Board membership on a nonprofit with a primary purpose of CD is assumed ahead of time to be using your financial service industry expertise.

If the bank makes a contribution to the food bank (or buy food, supplies etc.) and has staff work there for the event, examiners are more likely to give some "extra credit" for the staff putting in hours. It will be treated as a "program".

I ditto what Bullseye says, and would like to add this: we have employees that also sit on BOD's that are part of finance committees, grant committees, audit committees, we have some that are representative payees for senior citizens who can no longer manage their own finances, they organize fundraising events (not just work at a fundraising event but put the whole thing together, I think this was in the new Q&A's), count the cash cans for the Salvation Army at Christmas time, there are lot's of other things that can be done besides just being the treasurer. I try and spend a little bit more time asking questions to those who volunteer for certain organizations to find out what they are really doing in their roles.

Kaybee - Interestingly, this is almost verbatim what I originally told management about this little project. They were the ones pushing for the other route (comp time, etc.).

Our examiner said that you can never count employee salaries as a donation.

Sorry to revive an old thread, but that's exactly right. The Q&A's specifically address that issue.

§ll.12(t)—7: Will the agencies
consider as a qualified investment the
wages or other compensation of an
employee or director who provides
assistance to a community development
organization on behalf of the
institution?
A7. No. However, the agencies will
consider donated labor of employees or
directors of a financial institution as a
community development service if the
activity meets the regulatory definition
of ‘‘community development service.’’

I'm surprised anyone ever got to include staff time as a donation.

Can anyone simply define a CD-qualified organization? Thanks.

An organization that has a primary mission to stablize or improve low or moderate income areas or people.

ha!

"simply" is not a term one can use when it comes to regulations...

Does anyone have a CRA community involvement survey they would be willing to share? Thank you!

Our examiner stated that wages are never considered a CRA investment.