Empowerment Through Data: Impact data confidence for your credit union

By Tamra Thetford, CNote
March 22, 2024

Imagine your credit union knew what impact data it needed to collect and had a framework for presenting that data to impact investors looking to make a positive impact with their balance sheet. What kind of difference would that make for your organization?

Credit unions are already serving low-income members, rural communities, communities of color, and other communities that have been ignored by the mainstream financial system – the challenge is translating that impact, particularly to the expanding network of institutional impact investors.

With support from the W.K. Kellogg Foundation and the Mastercard Impact Fund, CNote conducted extensive stakeholder interviews which resulted in the development of an impact framework that is inclusive of the strengths of credit unions and that resonates with impact investors and impact measurement standards.

Impact-driven credit unions can utilize this framework to identify impact targets, connect impact strategies to these goals, and substantiate their work with impact data that could one day be the standard for the community finance industry. Moreover, this framework empowers impact-driven credit unions to substantiate their work with consistent data, enhancing their capacity to measure and articulate their impact more effectively.

CNote’s Impact Themes

Impact Theme 1: Addressing Community Social and Environmental Challenges

• This theme allows institutions to identify social and or environmental challenges that are present in their communities. CNote recognizes the United Nations Sustainable Development Goals (SDGs) as a widely adopted framework for categorizing these goals within the impact-investing and impact-measurement industries.
• By aligning with the SDGs, impact-driven credit unions can effectively identify their social and or environmental impact goals and connect the work they do every day to the impact investors seeking specific impact themes or SDG alignment.

Impact Theme 2: Serving Under-Resourced Groups

• CNote firmly believes in the transformative power of impact-oriented credit unions to generate greater economic opportunity and financial inclusion across the United States. Impact-driven credit unions work with under-resourced communities and identify the social and environmental challenges faced by these groups.
• Examples of such communities include but are not limited to, low-to-moderate-income individuals, BIPOC communities, and rural areas.

Impact Theme 3: Responsive and Responsible Products and Services

In this theme, credit unions provide examples and are recognized for the products, services, and programs they offer that are tailored, responsive, and address the identified social and or environmental challenges faced by under-resourced communities.

• Examples of such initiatives include financial education programs, small business lending (loans less than $1M), and affordable housing financing.

Impact Theme 4: Community Integration

• This theme focuses on how financial institutions actively engage with the community and establish mechanisms for obtaining feedback. By remaining responsive to the evolving needs and challenges of the communities they serve, these institutions align their assets and deposits towards community financing, consistent with their primary purpose.

Impact Theme 5: Promoting Diversity, Equity, and Inclusion

• Recognizing the importance of DEI (Diversity, Equity, and Inclusion), financial institutions integrate these principles into their governance structures. Over time, these institutions strive to achieve their stated DEI goals through the implementation of inclusive practices throughout the organization and tracking organizational diversity metrics.

Impact Theme 6: Financially Stable

• Understanding the vital need for financial sustainability in impact-driven institutions, this theme addresses the long-term viability and operational health of the institution. By maintaining financial stability, these institutions can continue providing essential financial products and services to their communities.
• This category captures data related to financial sustainability, ensuring the institution’s ability to fulfill its mission and support community needs in the long run.

What Do Credit Unions Gain by Utilizing This Framework?

CNote's Impact Framework provides credit unions with a robust tool to pinpoint impact targets, align strategies accordingly, and fortify endeavors with evidence-based data. This empowers impact-driven credit unions to substantiate their initiatives with consistent impact data, enhancing their capacity to measure and articulate their impact effectively. This framework also allows institutional investors like corporations to identify and connect with the credit unions that align with their impact goals.

Ultimately, utilizing this framework, credit unions are articulating their impact in a way that connects and resonates with impact investors. The resultant impact deposits strengthen small businesses, enhance financial education, promote affordable housing, and catalyze broader community economic development and wealth building.

In conclusion, CNote's Impact Framework represents a significant milestone in the journey toward more impactful community finance. Through replicable, reliable, and precise measurement of credit union’s impact, we can connect investors with authentic opportunities to support. This facilitates a future where impactful investments thrive, communities prosper, and sustainable change takes root.

Connect with CNote to learn more.

About CNote

CNote is a technology platform that provides a sustainable flow of non-member deposits that are low-cost and deliver consistent value. This service is available at no cost to CUNA member credit unions as arranged by CUNA Strategic Services.