Allowing members in good standing to skip a loan payment during the holiday season can provide them with an extra financial cushion to help cover their expenses. Some CUs have found that combining such a program with a charity fundraiser benefits the greater community as well.

For example, Chantilly, Va.-based Justice Federal Credit Union's recent skip-a-payment program gave members the option to skip their qualified loan payments for November or December, and 25% of the $30 skip-a-payment fee was donated to the National Center for Missing and Exploited Children. In this way, the 2,395 members who participated raised $17,962 for the charity.

“The idea [for the program] came back in 2004 as a way to infuse value to the membership at a time when it is needed most,” explained Joan Marsh, vice president of retail delivery systems for the $512 million credit union. “The donation piece was something we thought would resonate with the membership.”

The NCMEC, a nonprofit organization whose mission is to serve as the nation's resource on the issues of missing and sexually exploited children, works in cooperation with the U.S. Department of Justice. That makes it a good fit for the 50,000-member credit union, which provides financial services to employees of the Department of Justice and other law enforcement communities.

Justice FCU spread the word about skip-a-payment with a direct mailing to members, Marsh said. Credit cards and consumer loans were eligible to be skipped. With such programs, interest continues to accrue on the loan and the repayment schedule is extended. The impact of skip-a-payment on Justice FCU's income is minimal, Marsh said, when overhead and expenses for the campaign are considered. The credit union intends to repeat the program next year, she added, and may look to provide funds to a different charity.

A popular beneficiary of skip-a-payment programs is Credit Unions for Kids, the brand under which credit unions across the country fundraise for Children's Miracle Network Hospitals. In the Kansas City area, donations from CUs and their members go toward hospitals such as the Kansas University Medical Center. KUMC, said Ile Haggins, director of Children's Miracle Network of Greater Kansas City, is using the funds for the building expansion of a $20 million pediatric outpatient center. The funds will also support the hospital's cancer research and treatment.

“Children's Miracle Network Hospitals is so fortunate to be the beneficiary of the credit union community through the Credit Unions for Kids program,” said Aubrey Cichelli, vice president of communications for the charity. “We love to see campaigns [such as skip-a-payment] that offer members an incentive that inspires them to participate, which ultimately benefits the children in their community.”

Annette Vukas, a member of the $263 million Mainstreet Credit Union of Lenexa, Kan., said she felt moved to go beyond the $10 donation to Children's Miracle Network Hospitals suggested by the credit union in conjunction with its annual skip-a-payment program. Vukas decided to contribute $50 for each of the three loans on which the CU allowed her to skip a payment. “I thought, if they're saving me money I could do a little bit more than $10,” she said.

The credit union emphasized that it does not charge a fee to skip a payment and that the charitable donation is voluntary, adding that more than 75% of the members who participated in its skip-a-payment program from November 2010 through January 2011 chose to give to Children's Miracle Network Hospitals.

Mainstreet CU, said Dawn Smith, vice president of risk management, has offered members the opportunity to skip a loan payment for more than 20 years. After discussing feasibility with regulators in 2002, it added the option of donating to the charity in 2004.

The credit union now has about 57,000 members, 1,156 of whom participated in the skip-a-payment program for the 2010-2011 period. The $17,249 they donated set a new record for Mainstreet, topping the $16,459 raised in 2007, CEO John Beverlin said. The credit union, he added, has contributed an additional $55,440 to Children's Miracle Network Hospitals by matching a portion of the members' donations.

“Our members have come to expect this promotion and start calling in October to request their skip-a-payment,” Smith said. Also in October, she added, the credit union sends a memo to its member contact staff reminding them that the program starts on the first of November and outlining the steps required to process the skip-a-payment requests. Mainstreet markets the promotion, which excludes home equity loans and first-
mortgage loans, in statement stuffers, its newsletter and its website.

Frontier Community Credit Union of Leavenworth is another Kansas CU whose annual skip-a-payment program benefits Children's Miracle Network Hospitals, but it is structured slightly differently. Rather than a suggested $10 donation, there is a $10 fee for each loan that a member wishes to skip a payment on, and 100% of the fee is donated to the charity. For the 2010-2011 period, 1,346 members participated, resulting in a $13,463 donation. The credit union has been doing the program since 1998, and it has raised a total of $124,858 for charity.

Adrianne Cianciolo, marketing consultant for Frontier, explained that the program's genesis was inspired by the success of similar campaigns at other credit unions.

“Several Frontier Community Credit Union (then Fort Leavenworth Credit Union) staff and volunteers were familiar with the skip-a-payment program through involvement and experience with other credit unions, and had been impressed with how well it benefited both members and an extremely worthy charity,” she said. “The credit union was in the process of implementing a new marketing strategy in 1998 and the skip-a-
payment program was a perfect fit for that strategy.”

She also explained why the chosen charity appealed to the credit union. “The Children's Miracle Network emphasizes community, keeping charitable contributions local; that focus fits very well with Frontier Community Credit Union's charter of service-not only to our members but to our greater Leavenworth community and surrounding counties' population as a whole.”

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Members Embrace Skip Pay Linked to Charities

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