MagNet Hungarian Community Bank
For me, sustainability starts with the individual responsibility, that I am as a person, as a consumer and also as a corporate manager integrate in my decisions. Therefore, our business philosophy is that if we want to be a responsible, ethical, sustainable bank/company, our customers have also to be responsible and ethical. This is a collective responsibility and process of learning together. Instead of taking an authoritarian approach, which usually characterizes the financial sector (and also Hungary), we practice empowerment. We operate more transparently than our competitors, thus our customers receive additional information about us through which we motivate them to make responsible decisions. Such information may be about the social/environmental issues which the investors’ money goes towards, the civil issues supported by the profits we generate, or how much the customer is paying to maintain their bank account. Last time, more than 70% of our customers voted to select the NGOs we should support using 10% of the bank’s profits. This is much more than is typical of the level of support in our country (individuals often decide who to support using 1% of their annual tax). Our goal is to reach 90% and more.
Collective Donor Program
Industry: Financial services
Solutions of the macro-sustainability challenges
Empower consumers to increase their demand for sustainable products and services by providing reliable, actionable, user-friendly consumer information, communication and education
What´s the solution?
How the Community bank works is based on our society’s responsibility which is not our complementary but our fundamental work. Our goal is to implement a more transparent and value-oriented community in our country.
In the Community Donation Program (CDP) MagNet Bank gives 10% of its annual profit to civil organizations. The donation is determined by our clients.
As a first step we share with in our clients on how much profit we made by managing their money. As a second step we share with them that the profit will be used supporting important social issues. As a third step our clients will get involved and they can decide which organizations they want to support.
We also trust that through this program our clients will value responsibility and transparency in other areas of their lives as well.
In the Community Donation Program (CDP) the bank owners give up 10% of their after-tax profit and authorize MagNet Bank clients to decide who shall receive that amount from the civil organizations that participate in the program. Through this initiative and personal correspondence the clients will be able to support important causes and social issues which strengthen the relationship and the trust between MagNet Bank and its clients. It is team-building and it creates more aware and responsible clients. By strengthening our society we trust that we will have a more stable and more predictable economy and our bank activities can be more predictable.
Thanks to the Community Donation Program, between 2010 and 2014,136 civil groups received financial support from us in the value of HUF 110.684.470. In 2014 the Community Donation Program 70 civil organisations participated and close to 28.000 clients nominated their preferred civil groups to determine where the 10% profit of the MagNet Bank should go.
Civil organisations and partners will present their projects’ and their success will be published on the bank’s website. We believe it is important that our clients receive updates on the impact of their contributions.
We have received excellent feedback from our clients which makes us believe that the program is an effective initiative. It is one answer to the social challenges we face today.
In 2015 the program continues and our clients are in the process of deciding how to distribute HUF 35.119.695 to 80 civil organizations.