Committed to creating shared value

Faheem Masood took the helm of ESL Federal Credit Union in March 2016—the same year that Donald Trump became president. Anti-immigrant rhetoric was at fever pitch across the nation.

As ESL’s board members stood behind their choice of leader, its communications team prepared for blowback.

That didn’t happen. ESL received only a handful of calls questioning the religion and ethnicity of its new CEO. The support for Masood, a Muslim from Karachi, Pakistan, is emblematic of the trust he has built within ESL and in the Rochester community at large.

“As a minority myself, I understand, I could relate,” says Kenneth Bell, immediate past chairman of ESL, who is Black. “But I was so pleased to see that the entire board was compassionate and understanding of what Faheem was concerned about … and offered up any assistance that they could in order to get him through that period of time.”

Rochester is home for Masood, who years ago came to the U.S. to study. His covenant with the community is deeply personal just as much as it reflects ESL’s five core values of integrity, initiative, accountability, teamwork and caring about people.

“My community has given me a lot. It helped me create a life that I never imagined,” Masood says. “It has made me part of something.”

During his tenure, ESL has become one of Rochester’s top funders, supporting a host of community needs—from education and workforce development to building neighborhoods. It has a seat at local and state government tables and fosters relationships between nonprofits. In 2022, it gave $26.9 million to the community and $25 million in annual owners’ dividends to its members. A year ago, it shared $40 million in dividends, the largest payout in its history.

“When we are very successful, we intentionally return what we don’t need to finance our future, back to our membership and to the community, and that’s grounded in cooperative principles: help your community get stronger and return capital to the people who have helped you generate that capital,” Masood says.

It is challenging to get Masood to take some credit for ESL’s repute and success. He attributes its progress to efforts made before he assumed the CEO’s role, a diverse board, senior management and employees who embrace ESL’s purpose.

“He would never take credit,” says Celeste Kier, executive vice president/director of marketing and customer experience, who has worked with Masood since 2003. “And I know it takes a village, it certainly does. But it also takes a leader to help the company through it, to help a community through it. So, it takes a lot of people, but without someone who truly believes in it, it would not have happened.”

Giving back

ESL began a century ago as Eastman Savings and Loan Association, founded by George Eastman to assist Kodak employees with financial services, a perk of sorts. Ultimately, it was a vision of building a community, Masood believes.

“His theory was he helps employees save, they will buy houses, they will care about the community,” Masood says. “They’re buying houses and therefore it’ll build neighborhoods, connections that would cause the community to thrive.”

ESL became independent from Kodak in 1995 and a year later revised its charter to become a federal credit union. Today, ESL is one of the largest credit unions in New York and ranks in the top 1 percent of more than 7,000 federally insured U.S. credit unions.

Its independence, former ESL CEO David Fiedler says, gave the credit union the first opportunity to form its own strategy and find its place in the community. (Fiedler was a Kodak employee and became ESL CEO in 2003.)

“My belief was that the real crying need was for a community bank,” says Fiedler, adding that a number of local banks at the time had been acquired by non-local entities. “It really left the void, a financial institution whose focus was Rochester. We quickly concluded that’s the path.”

ESL began by building a network of branches. The bulk of its branches were constructed between 1998 and 2010. It also became one of the first businesses to invest in revitalizing downtown Rochester, choosing to relocate its corporate headquarters from Irondequoit to Chestnut Street—a $50 million project.

At the end of last year, ESL had 23 branches. Over the years, as business grew, so did excess capital. In 2022, ESL had $9.1 billion in assets, served 15,000 businesses, and serviced $1.3 billion in mortgages. Its wealth management team managed $3 billion. The company employs nearly 900 people—65 percent of whom are women.

“I actually call it the capital conundrum … this is a nice problem, but it’s still a problem,” Fiedler says. “It keeps growing. What are we going to be doing? We looked very carefully at all of the real alternatives.

“We concluded that the highest and best use for the excess capital was to go back into the Rochester community. So, we presented that to the board in June of 2014. They agreed. And then we did some work over the next year to really look at the ESL Charitable Foundation as the primary vehicle for doing that and got board agreement on that in 2015. That did kind of set the stage.”

Ajamu Kitwana, a Boston-based consultant at FSG, a collective impact champion, got to know ESL through a consulting gig. He was struck by ESL’s commitment to create shared value.

“(I) came to learn and appreciate the sincerity and commitment of the senior leadership at ESL, the fact that they were hiring this kind of big consulting firm and really kind of digging into this challenge of shared value,” says Kitwana, now vice president/director of community impact at ESL. “Not every company—there’s a select few—has had the sufficient commitment to really invest in trying to learn their way through how to make an impact.”

Kitwana moved to Rochester in 2015 and was charged with running the ESL Charitable Foundation. ESL was ready to act when it came to giving back to the community.

Four years later, ESL partnered with the United Way of Greater Rochester on Project Uplift, with a $5 million innovation grant. The largest gift ever given to the United Way, the ESL grant targets barriers related to poverty and improving quality of life. Since then, its community impact team has grown and last year awarded 476 grants.

Articulating purpose

ESL also has taken a closer look at its activities to examine whether they align with its purpose: to help Rochester thrive and prosper. Masood says ESL is still learning but did find a few practices that needed further examination.

“We became much more conscious (of) what does part-time work (do) to families,” he says. “So, we instituted a policy to say, if you want to work full time, you have a full-time job; if you want to work part time, we have a part-time job (for you), but we offered everyone full-time employment.”

The credit union’s insufficient-funds fee policy also slid under the microscope. Fees have come down from $37.50 to $5 in multiple stages over the last few years. It was coincidental, Masood notes, that there were regulatory pressures to do so.

“We saw what we call a contradiction with our purpose because the people who were frequently paying that fee are the people who can least afford it,” he says.

Locations for new branches were scrutinized as well. Typically, Masood says, areas are studied for return on investment over a certain period. When considering underserved, underbanked communities, such evaluations fail.

“We took the perspective of we know financial services are very important in order to create prosperity,” Masood says. “If we go in and we have a longer timeframe, we expect that people will do better … so we extended the timeframe of return.”

ESL opened two new branches in the city and expects to open one more soon. Those moves have been intentional, Masood says. “That’s how we will build our business; we will be part of the change.”

He does not shy away from the issue of equity and inclusion—acknowledging that when Eastman Savings and Loan was founded, it was a time when prosperity was restricted to whites.

“That was the reality,” Masood says. “People of color were overtly excluded. We have done a lot of work to understand that, to understand what the impact of that is and to say, ‘How can we influence the future by changing that impact?’”

ESL offers some down payment assistance to people of color, particularly Blacks and Latinos.

“They don’t have generational wealth that allows them to build support,” Masood says. “They’re starting very low on the economic ladder. Now, importantly, it’s not like we stopped doing something for everyone else. We’re doing this in addition to everything we’re doing.

“Without taking anything from anyone, we’re creating greater inclusion for others,” he adds. “The intent there is to see prosperity become bigger for people of color that have not been able to participate.”

Though Masood is a person of color himself, he doesn’t claim to understand every issue that affects that population. He says his perspective is evolving, like the community and the nation.

“I think he’s gained a greater appreciation of, frankly, an awareness of the disparities and dynamics around structural racism in the community,” Kitwana observes. “And as he gains that awareness, and that’s the thing—it’s not just ‘oh well, that’s too bad’—he’s also then thinking about, what can I be? Who can I be? What can we do as ESL to actually make a difference? Which is exciting.”

A key player

This commitment to caring was most visible when the COVID-19 pandemic struck Monroe County. Real tests of leadership, Bell says, occur during a crisis.

“We’re just coming out of three years of something that only happens once every 100 years, fortunately,” he says. “What we saw is Faheem be put to the test in a really difficult time for his company, for his customers, for his employees. And the way he and his team responded to that was, I would describe it as extraordinary.

“He came through that with flying colors,” Bell adds. “That was to me probably the ultimate test of leadership that he has successfully navigated. And the board has been really, really pleased with everything that he and his company and his staff (have) done.”

For Masood, ESL’s response to the COVID crisis was remarkable.

“Everything pales in comparison to how this organization rallied during the pandemic,” he says. “The pandemic just looms so large, and yet, the foundation of this organization came alive during the pandemic.

“I don’t know if there will be anything in my remaining career that will ever be able to match what people rallied around for each other in the organization, the way they adapted to be able to support each other, to allow colleagues to support their families, people flexing their schedules because they didn’t have children to take care of and allowing colleagues to be at home.”

ESL gave more than $20 million to the community in 2020—a way to step up and help at the height of the pandemic.

“I love when I’m out in the community, when we’re out there talking, and I feel so proud to be part of this company and this community,” says Kier. “We get to hear stories and our team, we witness stories of how it comes to life. And they’re so inspirational. It makes you just want to do more.”

Today, ESL is a desired partner at key conversations focused on Rochester’s future. Public- and private-sector officials seek the organization’s opinion as they mull new ideas.

“Our government is much more participative. Our city, our county, our state (are) engaging in different ways, given the opportunity. I’ll extend that to businesses and not-for-profits,” Masood says. “I think the environment is (more) cooperative than I have ever seen it.

“Quite honestly, we went through a period in the city and county government, they wouldn’t talk to each other,” he notes. “They would not come to the tables that were being formed. And if they were, they weren’t necessarily full participants. But the attitude is completely different (now). So, the environment gives us the opportunity to participate in different ways.”

ESL goes in with a collaborative approach.

“Just because we’re investing a lot of money, doesn’t mean we get to tell people what to do,” Masood says. “We do best when we learn from others. … If we do things that are supportive of what the community is doing, we find that works much better. And frequently, the knowledge of what to do is outside our doors.”

Becoming CEO

When he started his career, Masood had no plans of being CEO. A paycheck was all he wanted. After earning a B.S. in economics at Allegheny College in Meadville, Pa., he considered returning to Pakistan with his wife, Laurie.

“I really struggled with the fact of going back. It’s a very different place for women. It’s hard enough for women who grow up there, but for women coming from the freedoms, relative freedoms, they enjoy here, it’s very hard,” Masood says. “And in my mind, I struggled because I said, ‘How am I going to make my life with my wife in that environment?’ and I was really struggling with that.”

A college adviser helped him with his decision to stay. The couple chose to live in Buffalo, where Laurie had roots.

“It was not an economic decision. It was a life partner decision,” Masood says. “I did not immigrate to the U.S. with the land of opportunity in mind, it was just … this is how this marriage can succeed, is stay here.  I was only 21. I probably didn’t realize how big a decision that was.”

The couple settled in Buffalo. It wasn’t easy for Masood to find employment right away in the mid-1980s. He recalls getting a job as a bank teller before Christmas. The first few years the couple did not dine out.

“I am very proud of us having built our life, and we built it from scratch,” Masood says. “But I have to say we never struggled. We were young, we lived within our means.”

Eventually, Masood came to Rochester—a former coworker who got a job at Eastman Savings and Loan suggested that Masood, who was finishing an MBA at the University of Buffalo, join her. Leaving Buffalo was difficult. Masood had developed a sense of community there and forged deep friendships.

“I need to have a community belong to and literally first two years we didn’t hang curtains in the house because (we thought) it was temporary,” he says of the Rochester move.

Career development was secondary to belonging. However, ESL evolved and began to grow.

“I have difficulty saying what I’ve done to make ESL what it is and what ESL has done to make me who I am. It was a perfect situation to land in,” Masood says. “I really flourished here, because it was just the perfect balance. Career was never on top of my mind when I left Pakistan, it was building a family, and career has been a tremendous bonus.”

Masood rose through the ranks soon after joining ESL in 1991, and found himself working with Fiedler, some years later. When Fiedler announced his retirement in 2015, Masood was selected to replace him. In addition to being a strategic thinker, with an empathetic nature and strong management skills, Masood was well-liked by employees.

“I do see Faheem as pretty much a natural leader, there are people that are just born with the innate abilities in that regard, and I definitely see him that way,” Fiedler says. “I think of him as the poster child for our five values.”

Masood’s focus on fostering diversity—in thought, experiences, race and gender—hasn’t gone unnoticed.

“I’m really appreciative of his conscientious desire to have the management team be diverse—he recognizes the value of that in driving something like our purpose forward,” Kier says.

Kitwana recalls being surprised by a portrait of boxer Muhammad Ali that hangs in Masood’s office. A hero of Masood’s, Ali is also an icon for Blacks.

“The fact that he has a poster of Muhammad Ali on his wall, at least for me, it’s like, ‘Oh wow, that’s interesting.’ You don’t expect every CEO to have Muhammad Ali on their wall,” Kitwana says. “His ability to kind of cross—and he’s had to, of course—cross cultural and identity kind of boundaries, to find and be himself, has been really uncanny and has been a unique journey.

“It doesn’t mean he understands every person of color, and he doesn’t try to pretend to, but at the same time, he certainly has a journey. … If anything, he’s aware of the way he’s not aware, and so he’s curious and he’s open and constantly open to learn.”

On the few occasions I’ve met Masood, our meeting has begun outside his office. He is usually chatting with employees, his laughter a sure sign of his presence.

“He has a great sense of humor, he’s easy to work with,” Bell says. “And, for me, that’s probably the most important thing about being in the leadership role, is having a good sense of humor.”

That humor and optimism doesn’t mean Masood isn’t serious about shepherding a successful business. Profits matter, he says.

“It is what we retain as earnings that allows us to continue to expand our services, to continue to pay our employees as inflation rises, to pay our members, the rates that are necessary,” Masood says. “We have to finance our business. As we frequently say, we have a lot of dreams, but we have to be able to finance those dreams. Ultimately, to live our purpose, we do need to be a thriving organization. It’s very hard to create prosperity for the community if we’re not prosperous.”

As a financial cooperative, ESL’s structure is different from other businesses, which might make it challenging for others that want to follow on its philanthropic path.

“One can’t say, well, ESL is doing such and such and everyone should be doing that,” Masood says. “Our context is somewhat different. I agree we do have tremendous awareness of the link between our success and our community thriving—if our community is prosperous, we will be prosperous, (there’s) clarity in that. But we are also enabled by a structure to activate actions on that differently. Having said that, I do think businesses (now) are more engaged, more conscious of that.”

He points to ROC2025 as an example of the business community coming together. The alliance of economic development organizations has a “coordinated capacity-building strategy that dedicates more resources to our region’s growth,” which includes workforce development, jobs and bringing new businesses to Rochester.

“There are collaborations there, and businesses are investing in it,” he says. “Government is at the table, but this is business money that’s being raised because you’ve got players who say that it’s important to them.”

Adds Masood: “Yes, what (ESL does) is significant. It is a drop in the bucket, though, relative to how much money is needed on the issues.”

Smriti Jacob is Rochester Beacon managing editor. The Beacon welcomes comments and letters from readers who adhere to our comment policy including use of their full, real name. Submissions to the Letters page should be sent to [email protected].