November 3, 2012; Source: New York Times

Forget the toaster, the frequent flyer miles, and the gift cards for opening a new bank account or referring a new customer. At ableBanking, a new online bank, people who open new accounts get a donation of $25 from the bank to any 501(c)(3) charity that the customer designates. According to the New York Times blog, “Then, each year on the anniversary of the account’s opening, the bank will donate the equivalent of 0.25 percent annual percentage yield (25 basis points) of the account’s average balance to that charity.”

It is a banking version of cause-related marketing. The founders of ableBanking say that “the attractiveness is the power of collective giving.” Customers of ableBanking who happen to support a specific charity could band together to open accounts and pool their initial and annual donations. ableBanking Co-founder and Executive Director Richard Wayne says that the charitable component is built into the bank’s operating structure and is not a temporary teaser to generate new business.

ableBanking has a number of options customers can choose for their charitable donations, be it one of ableBanking’s partner charities (based in Boston, where the pilot program began), charities in the customers’ communities (searchable by zip code), or a national charity picked from a list. ableBanking will also help customers make donations to churches lacking 501(c)(3) designations, though it isn’t as automatic as selecting a (c)(3) from public lists.

The six Boston-area partner charities listed on the ableBanking website are the Boston Children’s Chorus, Teach for America, the Greater Boston Food Bank, JVS (providing job training, placement, and other career supports), the MSPCA-Angell (pet adoption, advocacy, spay/neuter programs), and Rosie’s Place (the first shelter for women in the nation).

Although ableBanking operates without brick and mortar branches, it is a division of Northeast Bank, a community bank based in Maine. ableBanking’s three founders—Richard Wayne, Claire Bean, and Heather Campion—are all identified as experienced in banking. Of interest to us is their background in charity and philanthropy. Campion, the bank’s chief administrative officer, worked for the White House during the Carter administration, held senior campaign positions in the Mondale and Dukakis presidential runs, and serves on the boards of the John F. Kennedy Presidential Library Foundation and the Isabella Stewart Gardner Museum. Wayne, the CEO of Northeast itself, is chairman of RefugePoint, which provides assistance to refugees of war and conflict who “have fallen through the net of humanitarian assistance.” The CFO, Bean, was involved in microfinance programs in Central Asia and Russia from 2002 to 2004 and is now on the boards of REACH Beyond Domestic Violence, the Rockland Trust Charitable Foundation, and the Boston advisory council of Mercy Corps International.

On face value, offering savings rates that look reasonably competitive with other banks, ableBanking doesn’t look like a gimmick. Do you think a charitable deduction instead of a toaster is a successful strategy for winning new customers at a bank, especially one that operates totally online?—Rick Cohen