Charitable giving by financial institutions is historically governed by the Community Reinvestment Act and member-owned cooperative models, respectively, that require organizations to only invest in the issues that impact their communities and markets. 

However, the number of extreme weather events, commonly known to be increasing, has prompted the financial services sector to reevaluate the way the industry can organize itself better and deploy resources to catastrophic events, and how they can best be prepared, say industry leaders in the Inland Northwest. 

Robert Turner, a vice president of the Community Reinvestment Act for Spokane-based Washington Trust Bank, says one catalytic moment that forced the financial services industry to rethink its strategies happened in 2005 when Hurricane Katrina hit New Orleans and the Northern Gulf Coast. 

“We saw that as a country and a set of businesses that were responsible for responding to these kinds of situations, that when situations became larger and more dire, (we) weren’t organized in a fashion to respond well to that level of catastrophe,” Turner says. 

As a result, the industry reviewed its response methods and timing. Hurricane Katrina, for example, caused bank branches to close, leaving many people without access to their money, and hence unable to pay their mortgage. Usually in those situations, the bank would take the position of sending late notices and charging penalties. Now, banks can send out forbearance notices to support people who are impacted by a disaster and prevent their credit history from being negatively impacted.   

Now, banks aren't restricted to giving only to the communities in which they have branches and markets. They also can give disaster-relief funding to impacted areas adjacent to its markets as well, Turner says. 

“When a disaster occurs, it has a ripple effect across a much broader area than just a specific market,” he says. 

The industry also saw the importance of being able to direct funds almost instantaneously to places in need. When the Gray Fire burned through Medical Lake and surrounding areas last August, for example, Washington Trust Bank was positioned to direct funds immediately through its endowment, Washington Trust Bank Endowment Fund, which is administered by Spokane-based Innovia Foundation. The endowment directed $50,000 in the immediate aftermath of the wildfire to help seed the Wildfire Emergency Response Fund created by Innovia. 

“That money is available and sitting in place so we can deploy it quickly,” he says. 

Among Turner’s peers, conversations have evolved to address systemic and structural change that expands emergency response aid beyond immediate relief referred to as a “continuum of care.” A prime example is the COVID-19 pandemic, which resulted in a spectrum of needs from an immediate response like administering diagnostic tests to detect infection, to some of the more long-term impacts caused by the pandemic that prevented people from working and children going to school, he says. 

“We have to get beyond a Band-Aid approach,” Turner says. “I’m talking and working with people … to understand what we can do to affect systemic change.” 

Traci McGlathery, STCU director of community impact and advocacy, says the Liberty Lake-based credit union also has changed how it responds to disasters in recent years. For a long time, STCU would partner with the American Red Cross and KREM-TV to open the credit union's branches and take in donations. However, as disasters began to inch closer to home, such as the 2014 Oso mudslide in Snohomish County, Washington, McGlathery and her peers began to discuss and evaluate different ways to respond to disaster. 

In 2020, when the Whitman County, Washington, communities of Malden and Pine City were devastated by wildfire, the disasters marked a shift in the credit union's approach, she says. Many credit union staff members and sister credit unions were impacted by the wildfires, McGlathery says. STCU responded by donating grant money to the Northwest Credit Union Association, now known as the GoWest Credit Union Association, to support individuals within the credit union family who had lost their home. 

“That was a very pivotal time where we reassessed how to respond to disasters,” McGlathery says. 

Currently, STCU is considering how to support credit union employees and some of its largest partners that were impacted by the back-to-back hurricanes in Florida and the Carolinas, she says. 

In March 2020, when the onset of the pandemic shut down a majority of businesses, STCU set out to buy a large number of gift cards for member businesses and other businesses to have on hand and be able to support the community. Through that endeavor, a new program was born named Member in Need, so a member of the credit union can go to a branch and request a gift card when experiencing hardship. 

“That (program) has grown that now every time a member is impacted by a fire or having to leave their home because of evacuations, we equip our staff to be able to give a little.”

When the Gray Fire spread last year in Spokane County, STCU was able to give $50,000 instantly from its donor-advised fund, the Here For Good Foundation, which also is administered by the Innovia Foundation. Here for Good has given $120,000 to date. 

“We opened up the foundation to have others contribute during the Gray and Oregon Road fires,” McGlatherty says. “It was heartwarming that they trusted us to use it right and at the right time.” 

Innovia has played an integral role in convening the necessary industries and organizations to provide wraparound services that help with the long-term recovery of a community, McGlathery says. 

Molly Sanchez, chief community investment officer at Innovia, primarily focuses on the work of distributing funds to communities and nonprofit organizations within Innovia’s 20-county service area. 

“Disaster philanthropy is becoming an area that more and more community foundations across the country are stepping into and playing a key role,” Sanchez says. "It's just a growing sector of work for community foundations across the country." 

For Innovia, the organization became more deeply involved with response and recovery to disaster at the onset of the pandemic, Sanchez says. In large part, the reason Innovia became so heavily involved was because there was a lot of funding from outside the region that was coming in and philanthropic organizations across the country took on the responsibility of dispersing those funds to the community, she says. 

“When it was all said and done, we distributed about $35 million throughout our 20-county region,” Sanchez says. “That was a combination of funds from private philanthropies that wanted to get dollars regranted and distributed and ARPA funds.” 

Sadly, when disaster happens, there are usually people who will try and take advantage of the situation, Sanchez says. As a philanthropic organization, Innovia has a due diligence process in place and guidelines it follows to make sure dollars are going where they are intended to go.