|The leadership of McIlroy Bank & Trust Co. President Jim Glenn (at podium) was instrumental in creating the Safe Drinking Water Trust for rural residents of Washington County, Ark. Behind him are other partners in the In Our Backyard program. Sponsoring businesses are listed on the banner.|
In the fall of 1997, McIlroy Bank & Trust Co., in Fayetteville, Ark., was developing its marketing strategy for the coming year. The bank was looking to become involved in a community project that was broad in scope and had wide community appeal. Bank President Jim Glenn wanted McIlroy to participate in something that was unique and innovative, and would have a discernible impact on the residents of Washington County.
At the same time, Community Resource Group Inc. (CRG) was in the process of identifying partners that might assist rural residents in improving their access to water. In Washington County more than 4,000 people--about 1,900 families--do not have access to safe drinking water. In fact, many families get their water from lakes, streams or ponds, or they have it brought to their homes from a faucet someplace.
Cindy Webb, director of development and marketing for CRG, approached the bank to gain its participation in establishing a trust to finance loans that would connect families to safe water sources. Webb's pitch was based on the principal of "cause-related marketing." She used animal crackers (yes, the ones with the little string attached to the box) to illustrate her point. When Nabisco first introduced the crackers, both the shapes of the crackers and the box featured animals found at most local zoos. Now, they feature only animals that are classified as an endangered species to raise the public's awareness on the issue.
CRG had been challenged by the Ford Foundation to raise $50,000 locally, and the foundation would then match it dollar for dollar. The deadline for getting the matching grant was May 31, 1998. Once the money was raised, CRG would use the proceeds to establish the "Safe Drinking Water Trust," which would serve as a revolving loan fund. The idea of a revolving loan fund caught Glenn's attention because he felt it served a worthwhile business purpose, benefited the whole community and recycled the funds. The program is known as In Our Backyard.
Glenn decided to promote the idea to a few local business people, and he was instrumental in bringing six additional partners to the table. The business owners were as shocked as Glenn had been to learn that such a problem could exist in one of the states most prosperous counties. According to Glenn, "If you don't know about a problem, you can't deal with it; but once you know, you can't ignore it."
One partner is Carl Collier, owner of Collier Drug Stores, who immediately picked up on the health concerns associated with not having clean water. He said people regularly get sick from drinking contaminated water or from eating food washed in it. Other business partners that enthusiastically embraced the program included Superior Auto Group, Jose's Restaurant, Marvin's IGA, Upchurch Electrical Supply and Blackwood Martin/CJRW.
To heighten the community's awareness about the severity of the problem and to publicize the efforts under way to alleviate it, each partner tied its commitment to consumer product usage, such as donating a portion of each prescription filled, car sold or vehicle oil changed. McIlroy contributed a portion of each credit card purchase by card holders during a nine-week period and included stuffers in monthly account statements to advertise the program.
The bank's customers called to say they were glad to be part of the process, buying "Water 2000" bottled water for $1 a bottle to promote In Our Backyard. The combined efforts raised $60,000 before the May deadline.
In cooperation with the Rural Water Authority, CRG already has started making loans to low- and moderate-income borrowers. CRG does the loan intake, underwriting and servicing. To keep repayment simple, the Water Authority includes the loan payment amount in the monthly water bill. It is expected that the typical loan size will be between $400 and $1,000, and terms can be for up to five years with below-market interest rates. According to CRG, the first two loans already have been made to rural residents.
As for McIlroy Bank & Trust, it is proud to be part of the process, Glenn said. "There has been a great expenditure of time and money over six to eight months, but this was a project that was much more involved and intense than just making a contribution to a worthwhile cause."
Keep up with what’s new and noteworthy at the St. Louis Fed. Sign up now to have this free monthly e-newsletter emailed to you.
Fed in Print: An index of the economic research conducted by the Fed.
FedCommunities.org is a portal to community development resources from all 12 Federal Reserve Banks and the Federal Reserve Board of Governors.