When Capital One bought ING Direct last year in the first big bank acquisition since Congress passed the Dodd-Frank Act, the deal was subject to a high level of scrutiny. While regulators poured over the facts and figures, what they really wanted to know was could Capital One be trusted?
“We had hearings with the [Federal Reserve] in three different cities. Numerous nonprofits testified on our behalf about our corporate character,” said Carolyn Berkowitz, Managing Vice President for Capital One Bank and President of the Capital One Foundation. “They all said, ‘…this is a company that’s going to add to our community, not detract from it…’ That kind of commitment doesn’t come from just writing a check.”
Milton Friedman famously said, “the business of business is business.” Corporate responsibility skeptics often ape Friedman, asking how these programs impact the bottom line. But for most publicly traded firms, over 80% of their market value – the real test of shareholder value – lies on the balance sheet in good will and brand. Capital One’s good will, built through skills-based volunteering, added to its brand value and its book value because it helped ensure the purchase of ING Direct.
Although Capital One’s skills-based volunteering program is more than ten years old, in 2008 the company expanded and restructured it to make it a cornerstone of their brand. At its founding, Capital One was “a company that was a new idea, knocking down the price of credit. That was a mission unto itself,” said Berkowitz. “For our associates, taking on pro bono is like a new mission. Having the opportunity to use their very honed skills, taking them into the community and back to the company is a reward for our people and has a big impact on our ability to grow.”
Capital One joined 365 of America’s largest companies and well-known brands in taking the A Billion + Changepledge to “donate their best talent to tackle tough problems in their communities and around the world.” The pledge inspired the donation of the equivalent of $1.998 billion of volunteer time and the organization wants to get to 500 participating firms by this summer (Source: Billion + Change). But skills-based volunteering isn’t an easy story to tell. Read the rest of this entry »