University of Wisconsin Credit Union in Madison, which does business as UW Credit Union, has committed $1.5 million toward a racial equity fund to help benefit communities of color in the state.
The project, which was announced Wednesday, makes UW the latest in the credit union industry to pledge a significant amount of money toward causes related to social justice and diversity, equity and inclusion. In January, Visions Federal Credit Union in New Jersey awarded a
Through the fund, UW CU will donate $1.5 million to two separate United Way chapters, with two-thirds of those funds going to the nonprofit’s Dane County division, which serves consumers in and around the credit union’s headquarters. A United Way chapter serving greater Milwaukee will distribute the remaining $500,000 in that region.
“The pandemic really brought increased attention to the racial disparities that exist in our communities, especially among our communities of color,” said Sheila Milton, the credit union’s vice president of diversity, equity and inclusion. “This past year, with all the injustice and violence pushed to critical heights, tensions were high and emotions were stirred among our employees and our members, and we felt there was a need for us to do something as soon as possible.”
While the pandemic and social justice protests may have spurred the initiative, it was funded largely thanks to a substantial increase in mortgage volumes, said Milton. Call report data from the National Credit Union Administration shows mortgage lending at the $4.2 billion-asset institution grew by 17% in 2020 to surpass $1.5 billion, more than 55% of its total loan portfolio. Overall loan balances there rose by nearly 9.7% last year, while total earnings were up 37% to surpass $61 million.
Local United Way chapters will distribute the credit union’s funding to where it’s needed most, with grant requests being accepted through an online portal. The application period opens March 17 and decisions will be made by an advisory board made up of community members and employees from the credit union.
Part of why the United Way was selected as a partner, said Milton, is because the two organizations have a history of collaboration, including initiatives in the past year related to affordable housing and COVID relief.
The program is expected to be an ongoing effort, said Milton, with the $1.5 million distributed over a period of as long as four years. There are also hopes that additional funding can be allocated in the future.
“We know this is not something that’s a one and done,” she said. “We plan to partner with these organizations…and our commitment to this organization and this cause is not just one year. Now, we haven’t publically said anything about the funding part in the future, but we know that this work takes a long time.”
UW Credit Union is also not directly looking for this project to boost the bottom line. While any growth to membership and lending that comes from the fund will be a nice bonus, said Milton, “that’s probably not our driving force. When I think about economic mobility and financial stability, we want to do more with education and get people that aren’t banked banked, and get them to understand the difference between a credit union and a bank. We want to help provide that financial inclusion for them.”
