Edward Filene Credit Union Awards for Excellence - ENTERPRISE - Criteria

All credit unions are businesses that must produce proven economic outputs.  A viable credit union business can instigate and drive worthwhile social change.  A desire for social change cannot drive a business.  

"Credit unions are first a business" 
Roy Bergegren, First Chief Executive Officer, Credit Union National Association, USA
“Credit unions are about the economy” 
Roger Marsh, Head of Credit Union Section, Prudential Regulation Authority

It’s crucial for credit unions to develop existing skills, acquire new ones and adapt ethically to all methods of trading used by their competitors and devise newer ones of their own for their furtherance and survival in the competitive market - the financial services industry where the consumer has many choices - demonstrating continuously the core values of the mutual ownership, co-operative decision making nature of “our firms”. 

These techniques can attract the savings of new and current owner-members wishing to obtain an investment return on their deposits and dispensing of loans to these people “for a provident and prudent purpose” of a greater amount than that held in their deposits.

Click on these headings to see the criteria and suggestions for evidence for each Award category:- 

6. "Young Savers Schemes in Primary, Secondary and tertiary education "
7. "Achieving continuous business growth
8. "The Rochdale Award - Co-operation amongst Co-operatives
9. "Serving as a financial incubator for owner-members' seed, small and medium enterprises
10. "Prudential Standards Award
11. "Setting up a "Friends" of a credit union"

6. Excellence shown in performance by a credit union hosting .... 
                 Young Savers Schemes in Primary and Secondary Schools - 4-16 years
                 Young Adults Schemes in Secondary Schools, Further/Tertiary Education -
                                                               Universities, Colleges and the workplace
  

Financial education is of course a continuous process from the primary school level until the “University of the Third Age” - so there shouldn't be a “cut off” at primary school level.  Many initiatives are now being undertaken to educate young people in full-time education about money and its uses, bookkeeping, accounting, computer use, sales and marketing, civil education, self managment and others delivered through the education escalator.  This escalator of development is crucial as it will produce the young savers/borrowers/co-operators, who are our future owner-members and apprentice leaders.  Evidence could include reference to:

  • How was the savings group set up?
  • Who achieved this - parents/guardians, teachers?
  • What introductory and ongoing education did the young people receive and who delivered it?
  • Who runs the collection/service points and what is the pupil engagement in the project?
  • How are the natural young leaders discovered, encouraged and developed?
  • How has this project benefitted the credit union financially and socially - stretching its brand awareness in the community it serves?

7. Excellence shown in performance in achieving continuous business growth, applying internal innovatory methods, including mobilising external support from the private and public sectors and delivering paid for projects, producing revenue for the credit union  (Entries funded by grants are not valid)  
It's necessary to provide narrative and numerical evidence for this Award entry.  As this information is the intellectual property of the credit union and financially sensitive, only the Awards office and Judging Panel will ever have sight of it and will remain strictly confidential at all times. Quantifiable evidence can be in the form of management accounts, quarterly/annual returns and indicators of success from 1/4/2018 could include . 

  • Net aggregate and maintained increases in owner-members recruited, savings mobilised, loans granted.
  • Increases in revenue received from any non-regulated activities
  • Increases in productivity arising from the application of technology leading to upskilling of personnel, downsizing or redeployment of others, whilst maintaining/increasing high levels of service delivery.
  • Control of all revenue expenditure expressed in figures and as a declining percentage of revenue
  • Increases in net surpluses and reserves, dividends paid and/or loan interest, rebates given
  • Gross revenues produced from all regulated and trading activities undertaken.
  • What was the requirement for external support, finance or other resources, i.e. premises, equipment, etc?
  • Were each provided and was there a cost that the credit union had to meet?
  • What if any was the social improvement or gain to the community served by the credit union?

If support of any nature has been mobilised from either the public or private sector in the form of a grant; the conditions of which can be of a non-commercial outcome, this would not meet the criteria; however, it can be in the form of a donation and written evidence that this support is given for engaging the services of the credit union to deliver a product or service commercially would validate an entry for this Award, providing evidence such as ...

  • Why were/are the services of the credit union required? Special skills etc.
  • What was the desired outcome of the project/s?
  • What actions did the credit union have to take to deliver the project/s?
  • What were/are the tangible facilities ongoing or final outcomes of the project/s?
  • Were/are any extra facilities required such as premises, equipment of any type "paid for" or secondment staff required to deliver the project/s?
  • Did the credit union have to meet these extra costs (if any) or were they met by another party?
  • What were/are the tangible and financial contributions of another party as contributor or partner?
  • Did/do the costs incurred in running the projects "wash the face" of the credit union? Break even or profit?
  • In line with the Accounting Standards, FRS102, did/does the provision of any benefits in cash or kind provided to the credit union by another party appear as a Note to the Auditors Accounts?
  • What were/are the trading gains made by the credit union?  See indicators of success above
  • What if any were/are the social gains to any community served by it and any partner organisations?

8. Excellence shown in performance by a credit union pursuing International Co-operative Alliance (ICA) Principle 6 "Co-operation amongst Co-operatives" - the "Rochdale Award"
 
A credit union is foremost a mutually owned, co-operatively run, professionally managed savings and loans "firm".  As such it should be both logical, fraternal/sororal for a credit union to be the savings and loans "firm" of choice to all other non-financial co-operatives and co-operators within the remit of its "Common Bond".  Credit unions can identify the presence of co-operatives and their members within their Common Bonds by accessing the websites:
 UK - www.uk.coop/directory; Ireland http://icos.ie/find-your-co-op/ and suggestions for elaborating on this entry are .....  

  • How did the credit union outreach to these other co-operatives? Methods used?
  • How were the offerings of core products, ancillary services and ventures presented to the target co-operatives/co-operators?
  • How were the needs ascertained of financial products and services particularly relevant to co-operatives and to self employed co-operators in particular?
  • In line with ICA Principle 6, how were inter-trading marketing facilities offered to the co-operatives and other co-operators with whom it deals? 
  • What were/are the quantifiable results produced from this activity?  e.g.
    • Increases in the number of corporate and individual owner-members; aggregate savings and loans
    • Examples of development of intertrading between co-operatives, their co-operators, the credit union and its owner-members
    • Increases in the co-operative branding activity and presence in the area of the Common Bond.
    • Increases in all types of co-operative partnership working, such as joint ventures within the Common Bond, e.g. commercially, educationally, socially etc.

The intention of this Award is to create a joined up and integrated co-operative commonwealth and the Judging Panel will be looking for positive measured oucomes from the pursuit of these ideas.

9. Excellence shown in performance by a credit union serving as a financial incubator for seed, small and medium sized businesses operated by owner-members
Elsewhere in both the developed and developing credit union world, emphasis is given to granting loans for business reasons, giving economic empowerment - an increasing value. However, generally in the UK loans are given to service consumer debt - a wasting asset.  What a missed opportunity for both participants!  Credit unions should occupy this space.  The owner-member in business will grow economically through the credit union; the credit union will grow by serving the needs of its members, which can include, for example, offering hot-desking on the credit union's premises, counselling and business education. 

To give credence to an entry, written evidence and data requested could well contain intellectual property and very sensitive data, which will only be seen by the Awards Office and the Judging Panel and will remain strictly confidential at all times. Suggestions for evidence follow - this is not an exhaustive list ....

  • Were any new businesses started and if so how many?  What products/services do they provide?
  • Were any existing businesses developed and how many?  What products/services do they provide
  • How many new jobs were created by these businesses?
  • What sort of aid did the credit union give to these businesses, i.e. financial, business education, mentoring, counselling, provision of premises, hot-desking at ouset and ongoing?
  • Is there any evidence of the credit union assisting in the "blind" marketing of these businesses to its owner-member or other co-operatives/co-operators?
  • How much aggregated business loan revenue is generated for the credit union? e.g. number and amount of business loans; loan interest earned.  Are there any in arrears?  If so, the aggregate amount outstanding?

Photographs, media releases, films or testimonials demonstrating the successes of any of these businesses can be attached to this submission.

10. Excellence shown in performance demonstrating achievement of Prudential Standards

There are a number of issues known to bring about failure in credit unions.  The purpose of this Award is to look at what practical measures are in place to safeguard and avoid the risks of failure that have contributed to the collapse of too many credit unions over the past few years. Entries should describe in detail what measures your credit union has in place to ensure as much as possible these threats are mitigated against.   

The two or three examples noted below under each heading have come to the attention of the Foundation and a much longer list of possible risks/threats can be viewed here  

Auditors -
Who don't produce reports on accounting, management, operational and lay leader shortcomings in the Management Letter with the draft Accounts to the Board of Directors.
Who don't audit at least 10% of all Share and Loan Accounts, particularly those of all lay leaders, management and dormant accounts.
Banks -
Who don't know, understand or if they do, condone and ignore activities and transactions that are contrary to the objects of a credit union under the 1979 Credit Union Act.
Who have even offered finance to fund such activities.
Boards of Directors - 
Who are not educated to task to perform the role of a credit union director undertaking a specific role and able to perform others when required to do so.
Who don't realise that the Board is in "loco parentis", safeguarding the interest of all the owner-members and in office only with the consent of all the owner-members to whom they are accountable at all times.
Credit Union Association bodies and leagues - Although the formal recognition of self regulatory bodies and their common law authority over all their affiliates disappeared with FSMA 2600, it's not been replaced with ...
Outreach as a duty of care to their affiliates who pay subscriptions.
Genuine offers of assistance or mentoring to their subscribing affiliates, not helping credit unions experiencing difficulties.
Computer Software -
That doesn't contain as standard the functionality for instant "real time" reporting to the Board of Directors, Supervisors, Senior Management, External Auditor (maybe) and Regulators.
That is expensive at outset (purchase), ongoing (service charges) but doesn't include as standard updates to UK credit union law and regulation.
Credit Union Consultants
Acting as "Shadow Directors" (an illegal act) by design or default, not just informing, educating and encouraging the organising committees of "proposed" credit unions or the Boards of "approved" one.
Who have a bias when recommending suppliers of products or services, but don't declare such a preference or relationship to the Board of Directors at outset.
Owner-Member Education
A credit union's "customers" from outset and ongoing not being aware that as depositors of funds and borrowers from the credit union, they along with other owner-members equally (not valued by the size of their deposits) own the business and by right can and should hold all of those that run it, in any capacity, to account at all times.
The lack of an engaged owner-member "bottom up" democracy is a major cause of negligence and malfeasance committed by all of those in authority in a credit union.
Professional Managers/Management or contracted out 'back office' functions
Who by the intention, ignorance, lethargy or default of the Board of Directors, assume control of the credit union and act as "Shadow Directors", instead of fulfilling their role of enacting the will of the Board of Directors, which is ultimately responsible to its electorate, the owner-members.
Contracted out 'back office' functions that can often assume the function of professional management and, to suit their own purposes, impose a "one size fits all" solution on one or more credit unions.
Supervisors
Who exist on paper or not at all.
Who don't identify and formally report to the Board of Directors and Regulators if and as necessary all failures in the corporate governance structure of the credit union.

11. Excellence in performance by a separately constituted “Friends” of a credit union and acting as a hub for activities that are not part of credit union regulated business (to comply with the UK Credit Union law and regulation, a separately constituted "Friends" is required if the credit union is acting as the provider of any "non-regulated" activities that are not part of the core saving and loans regulated business). 

Elsewhere in both the developed and developing credit union world, credit unions are at the heart of multi-purpose co-operatives, providing savings and loans facilities to other co-operatives and co-operators, or are permitted to act as multi-purpose cooperatives themselves, take a look at the Facebook page of LAMAC Multipurpose Cooperative based on the island of Cebu in the Philippines.

The "Friends" of a credit union, provided it is correctly structured (separate bank account, management committee, accounts etc) can undertake all activities of a business and those of an educational, social and charitable nature (indeed this was and still is why credit unions were set up in the UK by owner-members from the Caribbean and island of Ireland).  Not only can the activities undertaken by the "Friends" be profitable, with the net proceeds donated to the credit union (or local non political/sectarian causes) but as a result stretch the brand recognition and its reputation as a force for good in the community it serves, which could also be good for business.

With grant funding and material assistance from the State coming to an end in Great Britain (Governments and assemblies have more pressing priorities), donations made by the "Friends" in either cash or kind might be essential for the credit union to remain financially viable.  Donations of cash to the credit union will appear as a revenue receipt in its accounts; those made in kind, to comply with FRS102 should be recorded as a "Note to the Accounts".  Advice on the tax treatment of both must be obtained from the credit union's auditor as the cash donation could be subject to Corporation Tax as it is a non core activity and donations "in kind" as a bounty - the receipt of something of value for which nothing was paid.

The "Friends" can (say) run an owner-member only closed lottery, a co-operative food store, operate a food bank, run after school clubs, set up an enterprise zone/premises for local businesses that will empower people socially and economically, etc. etc. 
Possible items of evidence follow - not an exhaustive list .... 

  • What are the purposes of the “Friends” of the credit union?
  • Is it run by owner-members entirely? (Many owner-members by temperament won't want to participate in a meeting based democracy but instead would prefer to "do things")
  • What are the business, trading, educational, social, charitable activities undertaken and operated by the "Friends", such as Foodbanks, Pre/After School or Third Age clubs (adult social care is very big in Korean Credit Unions), Money education courses, donations to good causes.
  • Is the “Friends” in any co-working relationships or partnerships with other organisations for mutual benefit?

Credit unions must constantly strive to be a force for delivering good in their communities and the wider world. 

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The following Award is open only to selected entrants, the winning of this does not count towards the Supreme Award (click for information on this)  

“Edward Filene Credit Union Award for Performance Excellence by the winner of a category making a film about their entry and Credit Union

This Award will be open to credit unions winning one or more categories, at which point (in utmost confidence) they will be requested to make this film which should cover specifically the activities described in their winning entries.

Only after the Judging Panel has made their decisions will the invitations go out to make this film.  The film editor, who compiles these films into an edited loop, acts as the Judge for this Award.   No prior notice will be given of success in this Award category. 

Good luck with your entries!   Any questions - don't hesitate to contact the Awards Office - see the "Helpline", including the 10 Top Tips to write a winning entry, FAQS and the judging process