Whether it’s volunteering for a social services organization or serving on the board of directors of a favorite charity, people have different ways of giving back. Businesses should encourage community involvement because it benefits everyone from the employee to the employer to the individuals being helped.

“As a company, we recognize we have a social responsibility to help the communities we serve,” says Sean Richardson, the president and CEO of FirstMerit Bank’s Cleveland region. “We benefit by being in those communities, so we feel a unique obligation to give back to those communities and make them better places to live and raise a family.”

Smart Business spoke with Richardson about how businesses can get involved in their communities.

How can a company help busy employees find time for community service work?

First off, don’t tell people to volunteer; ask them to volunteer. If you are really committed to community involvement, people will volunteer. Again, don’t tell them what to do — simply say that community service is a part of the company culture. If an employee wants to be a part of that culture, then show them what you would like to see from them.

Honestly, community involvement can take whatever form an employee chooses. It’s not a cut-and-dried checklist, so encourage employees to find something they are really passionate about, and allow them to commit themselves to community involvement during work hours. If they are going to take time away from their families and time away from the office, then it should be for something they are passionate about.

If simply asking doesn’t work, how can a business encourage volunteering?

Do as much as you can to make it easy to volunteer. If you organize the community service effort and just ask for volunteers, employees will be more willing to pitch in than if they had to find a community service effort on their own. Having someone help organize activities for the company makes it easy for employees to volunteer.

Even in small businesses, there is usually someone who is passionate about community involvement. You can always ask your employees if they have any interest in helping organize community activities for the company. You may get a volunteer out of your workforce who doesn’t mind heading that up for a year, or forever.

Even if you don’t have the resources to have a dedicated community relations person, you can have a volunteer in your business to do that for a set amount of time, and then rotate that responsibility.

How does a business’s community involvement benefit the employees?

First, it makes them feel good about working for the company. Most people want to work for an organization that cares about its friends and neighbors, not just the bottom line. And usually, your employees are those friends and neighbors, because you hire from within the communities you serve.

Community involvement also shows employees that the company cares about more than just the company itself. It helps boost morale and is great for team building. Employees often have a lot of fun working together toward a common goal. It creates a buzz around the office and it brings people together. Spending time away from the office as a group creates a closer working relationship between coworkers. Plus, you get to meet other like-minded, socially responsible people outside the workplace. That networking with other people and companies can be great for business. If you have people in a business development role meeting people from other companies, they are exposed to other opportunities.

Where can businesses find ideas on how to get involved in their community?

In Cleveland, we are very fortunate to have Business Volunteers Unlimited (BVU). BVU was started by the business community to act as a liaison between the for-profit and the not-for-profit world.  BVU helps businesses pinpoint the right ‘match’ for their employees to get involved, either for board positions or for ‘Done in a Day’ types of projects for a group to do together.

What are some of the ways FirstMerit is involved with its community?

FirstMerit’s Cleveland Leadership team volunteers at social service and cultural institutions such as Cleveland Foodbank, St. Vincent Charity Hospital, Holden Arboretum and many others. We have a charitable giving committee that steers philanthropic dollars to organizations that support causes such as Transitional Housing, Cleveland Public Theater, Slavic Village and Hispanic Roundtable. In 2010 FirstMerit’s Cleveland Region gave more than $75,000 in philanthropy via this committee. We also are involved by lending money and providing banking services to many area not-for-profits such as Hospice of the Western Reserve, Boys and Girls Club, Cleveland Botanical Garden, Ursuline College and Playhouse Square Foundation. We are providing construction financing to the Uptown Development in University Circle that is in part driving the renaissance taking place in that vital cultural and academic hub for Cleveland. All of these dollars flow into the local community and help ensure a better quality of life and economic vitality for Cleveland.

Sean Richardson is the NorthCoast president and CEO of FirstMerit Bank. Reach him at Sean.Richardson@firstmerit.com or (216) 802-6565.

Published in Cleveland

Whether it’s volunteering for a social services organization or serving on the board of directors of a favorite charity, people have different ways of giving back. Businesses should encourage community involvement because it benefits everyone from the employee to the employer to the individuals being helped.

“As a company, we recognize we have a social responsibility to help the communities we serve,” says Nicholas Browning, the president and CEO of FirstMerit Bank’s Akron region. “We benefit by being in those communities, so we feel a unique obligation to give back to those communities and make them better places to live and raise a family.”

Smart Business spoke with Browning about how businesses can get involved in their communities.

How can a company help busy employees find time for community service work?

First off, don’t tell people to volunteer; ask them to volunteer. If you are really committed to community involvement, people will volunteer. Again, don’t tell them what to do — simply say that community service is a part of the company culture. If an employee wants to be a part of that culture, then show them what you would like to see from them.

Honestly, community involvement can take whatever form an employee chooses. It’s not a cut-and-dried checklist, so encourage employees to find something they are really passionate about, and allow them to commit themselves to community involvement during work hours. If they are going to take time away from their families and time away from the office, then it should be for something they are passionate about.

If simply asking doesn’t work, how can a business encourage volunteering?

Do as much as you can to make it easy to volunteer. If you organize the community service effort and just ask for volunteers, employees will be more willing to pitch in than if they had to find a community service effort on their own. Having someone help organize activities for the company makes it easy for employees to volunteer.

Even in small businesses, there is usually someone who is passionate about community involvement. You can always ask your employees if they have any interest in helping organize community activities for the company. You may get a volunteer out of your work force who doesn’t mind heading that up for a year, or forever.

Even if you don’t have the resources to have a dedicated community relations person, you can have a volunteer in your business to do that for a set amount of time, and then rotate that responsibility.

How does a business’s community involvement benefit the employees?

First, it makes them feel good about working for the company. Most people want to work for an organization that cares about its friends and neighbors, not just the bottom line. And usually, your employees are those friends and neighbors, because you hire from within the communities you serve.

Community involvement also shows employees that the company cares about more than just the company itself. It helps boost morale and is great for team building. Employees often have a lot of fun working together toward a common goal. It creates a buzz around the office and it brings people together. Spending time away from the office as a group creates a closer working relationship between coworkers. Plus, you get to meet other like-minded, socially responsible people outside the workplace. That networking with other people and companies can be great for business. If you have people in a business development role meeting people from other companies, they are exposed to other opportunities.

Where can businesses find ideas on how to get involved in their communities?

A great place to start is the local United Way. It touches so many different organizations in so many different ways. They are a great resource to find what organizations need help in your area.

We have a group here in Akron called the Center for Nonprofit Excellence that is also a good resource. Also, there are other leadership programs throughout the community that are usually dialed in to nonprofit organizations that need assistance.

Finally, look in the community section of the newspaper. You could probably open the newspaper on any given day and find a story about an organization that’s in need.

What are some of the ways FirstMerit is involved with its community?

In Akron, we’ve spearheaded a lot of disaster relief fundraising efforts: The Fire Truck fund benefiting victims of the 9/11 disaster, the Hurricane Katrina relief fund, the Tsunami fund, and the Biloxi fund for the hurricane in New Orleans.

We organize a lot of fundraising through the bank. In March, we are organizing the Akron/Canton food bank drive. We will have one Saturday in the month of March where every branch in our Akron/Canton area will be a collection point for donated food. We also volunteer on low-income housing projects for construction work, through Habitat for Humanity.

We also have a budget for individuals who are on boards of directors to support those organizations. Last year we invested $650,000 in nonprofit organizations throughout greater Akron.

Nicholas Browning is the president and CEO of FirstMerit Bank’s Akron region. Reach him at nicholas.browning@firstmerit.com or (330) 384-7807.

Published in Akron/Canton
Sunday, 27 February 2011 13:21

How to craft a well-thought-out estate plan

For many executives, estate planning is an uncomfortable subject. That’s understandable, but there are adverse consequences to avoiding it.

“Despite the benefits of estate planning, it is commonly the elephant in the room that everyone avoids talking about,” says Kenneth Dorsett, the executive vice president of FirstMerit Wealth Management Services.

“There are several reasons for this. Many people don’t want to face a subject that ultimately is about mortality. Others want to avoid stirring up family conflicts or are simply uncomfortable talking about money with their heirs. While the reasons for procrastination are many, the elephant doesn’t go away. Delay or avoidance can prove costly not only from a tax standpoint, but also in unnecessary conflicts, time and confusion among heirs.”

Smart Business spoke with Dorsett about the essentials that everyone should have in their estate plans.

Why is there a need for a well-thought-out estate plan?

With sound estate planning, you can ensure that your estate is distributed according to your wishes. A well-thought-out estate plan allows you to pass your property to whomever you want with as few legal obstacles as possible. Estate planning can maximize the value of your property by reducing or eliminating the impact of estate tax laws. Estate planning is also an opportunity to make arrangements for your children. Without a will, your spouse, children or other heirs could end up with less than you planned, the assets could be poorly managed, your children might not have the guardian you wished, or your estate could end up paying more in taxes and legal fees than necessary.

Can I write my own will?

Although there are many online sites to help you write a legally binding will, my recommendation is to work with your attorney. For one thing, a local attorney can make sure that the will conforms to your state’s laws. A professionally drafted will further ensures against legal challenges and the failure to include important details. Improperly drafted or last-minute, hand-written wills frequently are contested and invalidated in court. If you don’t know what you are doing, the outcome can be much different than you expect. Spending a few hundred dollars more on a professionally drafted will could end up saving your heirs from considerable distress and expense later on.

What should every estate plan have?

There are two powers of attorney you will need: one for financial affairs and one for health care, end-of-life issues and life support. The durable power of attorney allows you to designate a representative, such as your spouse or adult child, to perform certain actions for you should you become ill, incapacitated or otherwise unable to manage your affairs. The representative could pay bills, sell securities or make major financial decisions on your behalf, depending on how broad or narrow you limit the powers. Without a power of attorney, your spouse or other loved one would have to go through the delay and expense of seeking approval from the court to carry out needed financial transactions.

A medical durable power of attorney authorizes your representative to make medical decisions on your behalf, ideally to carry out what you’ve specified in your living will. But talk to that person before appointing them; be sure they understand and are comfortable with your wishes, and will be strong enough to carry them out even though some family members may object.

I also recommend a living will that states your wishes for end-of-life issues. By having these three building blocks in your plan, your heirs will avoid many emotional and financial challenges down the road. The next step is to address estate planning.

What does that involve?

As part of a sound estate planning strategy, many people choose to create trusts to not only reduce estate taxes, but also to help their heirs avoid the delays, expenses and lack of privacy associated with the probate process. Trusts can also be used to control the distribution of your assets after your death.

Another planning tool is the qualified terminal interest property (QTIP) trust. This tool works well in family situations where there is a second marriage and you have assets to protect for your children from a first marriage.

What mistakes do people tend to make in estate planning?

If you are working with an estate planning attorney, most likely the important areas are going to be properly addressed, including the impact of pending changes in estate taxes. However, I’ve found that many people overlook making arrangements for their personal effects, including jewelry, art work and collectibles. They simply assume that their loved ones will be able to agree on how to divide it all up. In my experience, these things are what people argue over the most.

Not long ago, there was a case involving two brothers who litigated for three years over the ‘stuff’ left in their mom’s house. They ended up spending over $50,000 on attorney’s fees fighting over items that were appraised for only $5,000. To avoid this happening in your family, draft a Memorandum of Understanding and attach it to your will. The Memorandum can be very simple, but it should also be very specific in detailing your wishes. Hold a family meeting to identify what your children want, and incorporate that into the memo.

As your circumstances change and evolve over the years, your plans need to be kept current. Don’t forget about external factors such as tax law changes and fluctuations in the value of real estate.

Few people sit down, annually, and take stock of their estates. But if you do, millions of dollars can be saved and much heartache can be avoided.

Kenneth Dorsett is the executive vice president of FirstMerit Wealth Management Services. He can be reached at (330) 252-8211 or kenneth.dorsett@firstmerit.com.

The opinions and information contained in this message have been derived from sources believed to be accurate and reliable, but FirstMerit Bank, N.A. makes no representation as to their timeliness or completeness. This message does not constitute individual investment, legal or tax advice.

Published in Akron/Canton
Wednesday, 11 May 2011 14:59

Market recovery

Job growth, increases in manufacturing and boosts in consumer spending and confidence have economists and average Americans alike predicting a better 2011 as the United States moves out of the recession. The economy is transitioning into an expansion phase, which begins when the economy gets past the old high-water mark for GDP, says Bob Leggett, Chief Investment Officer for FirstMerit Wealth Management Services. He believes the phase began early in the first quarter of 2011.

“Capital spending is strong, exports are growing and inventories have not yet been fully replenished,” says Leggett, who has more than 25 years of investment management experience. “All of this means production must continue to grow. While the unemployment rate remains unacceptably high, net job growth is still well established. The depression in housing and overall consumer deleveraging does not mean consumers won’t spend anything at all.”

Leggett provides further insight into market recovery and what investors can expect in 2011.

Do you think the possibility of a ‘double-dip’ recession is valid?

Double-dips are extremely unlikely to happen. The only double-dip recession we’ve seen in modern times was in the early ’80s, and that was done intentionally by Paul Volcker, the chairman of the Fed at the time, because he was working to break the back of inflation. Also, there are always soft patches or mid-cycle slowdowns like we experienced in 2010. When an economy comes out of a recession, it usually runs at a pretty hot pace for a few quarters, maybe even a few years, and then it invariably slows down. We feel there is plenty of pent-up demand out there to allow the economy to re-accelerate as we’ve seen over the past few quarters and we expect the expansion to continue through 2011.

What are the best opportunities for investment right now?

We are big believers in being diversified. That means you want to own a mix of assets — some stocks, some bonds. You want to have different types of stocks, like large U.S. stocks or big cap and small cap. You want to have international stocks. You want to be diversified across the market capitalization ranges and the economic sectors that companies represent. People should always start by thinking through their investment objectives. We work with our clients to create an investment plan and agree on how we’re going to allocate that client’s dollars. And right now, we tell clients they should be fully invested and not have much in the way of cash reserves.

What advice would you give to investors who are still worried about the market?

There’s never a perfect time to make a large change in your investment strategy. If someone has a very small investment in the stock market and could really afford to have a much larger one, we would say they should have a plan for gradually reinvesting. People on the sidelines should be dipping their toes into the water. If an investor tries to perfectly time entering the market, quite often he or she will never enter or will get frustrated and make a big move. And that’s how you end up buying high and selling low instead of the opposite.

Do you see interest rates rising in 2011?

We don’t see interest rates rising significantly in the foreseeable future. Interest rates are still quite low, particularly at the very short end of the yield curve, the shortest maturities, because that’s where the Federal Reserve can force them to stay low. The rest of the yield curve isn’t quite so much in the Federal Reserve’s control, so it’s going to be driven by inflation expectations and expectations as to whether the Fed is going to make any changes at the short end. The yield curve currently is quite steep by historic measures, and the Fed has clearly stated they are not going to increase the short end of rates any time soon. As for the longer maturities, I’d say investors have been back and forth on how concerned they are looking out a year or so in inflation. But overall, the inflation numbers remain very low. As long as unemployment is high, wage growth is going to be hard to come by, and that means that inflation should stay pretty low.

What is the state of the bond market?

Bond interest rates have risen recently. People have been really concerned about tax-exempt bonds. They’re worried the budget problems many states and municipalities have will lead to major difficulties in paying off the bonds when they come due. We think that’s a significantly overstated fear. We tell investors who are worried about tax-exempt bonds to stick to high quality. On the taxable side, we still think investment-grade corporate bonds are pretty good values relative to U.S. Treasury bonds. The Federal Reserve’s Quantitative Easing 2 plan is supposed to be pulling those rates down but hasn’t been successful thus far. We are concerned the Fed may be overly successful at their goal of bumping inflation rates up a little.

What are your thoughts on the housing market?

Housing is certainly extremely weak. It would be difficult for housing starts and permits to get much worse than they are. The problem is there’s no real reason to expect housing construction to pick up a lot either because there’s a huge inventory of homes either for sale or in foreclosure. The housing construction industry is a very small part of GDP now because housing is in a depression.

The question that needs to be answered on housing is: What happens to house prices overall? Prices are down very significantly from where they were. It’s really hard to see, with the improvement in the economy and very little new supply coming, how housing could get worse. Housing construction and increased housing prices would help consumer net worth and consumer confidence. The problem is it’s hard to see either of those areas improving much looking into 2011.

What markets can consumers expect to recover more quickly?

Business equipment spending has been good, and we think it will continue. On an overall basis, consumer goods and services are growing and consumer confidence will be helped by better job growth. The economy has entered a positive feedback loop in which business spending feeds consumer spending, which, in turn, supports stronger business spending.

Reach Bob Leggett at 1-888-384-6388 or robert.leggett@firstmerit.com.

Published in Chicago
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