Nonprofit Newswire | Banks Lure Rich with Charity

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February 4, 2010; Reuters | In the U.S., banks and financial services companies in general offer their investors philanthropic services in addition to investment advice and placements. The U.K. financial services sector is now breaking into this field in a big way with a rash of new programs and new hires focused on the philanthropic needs of their wealthier investors. What motivates them in part is a business rationale articulated by Barclay’s new “client philanthropy” director: “The business angle is we get closer to clients, keep clients longer and we may gather more assets eventually.” The philanthropy manager at Christian Aid described it as “Banks…saying if we want to grow (our) business then something like philanthropy gives us an extra dynamic.” Like the mammoth “charitable gift funds” associated with Fidelity, Vanguard, and Schwab in this country, the U.K. banks are thinking of offering a one-stop-shop kind of service for the investment and charitable needs of their clients. It’s not clear whether the tax incentives will facilitate quite the same dynamic as happened in the U.S. with the creation of Fidelity nearly two decades ago, but the language used by the banks for their philanthropic clients includes taking advantage of tax incentives for charitable giving and avoiding estate taxes. In a very rapid timeframe, largely timed with the growth of the mutual fund sector, Fidelity, Vanguard, and Schwab developed nonprofit gift funds that have become among the largest 501(c)(3) charitable givers in the U.S. With the U.K.’s financial sector starting this process in the wake of a deep international recession, their growth may not be quite as rapid and steep as their American financial services sector counterparts.—Rick Cohen

  • Maude Hill

    I would like to learn more about of how to reach out to Fidelity, Vanguard and Schwab for this area or regional as to how we might be able to tap into funding resource gifting for non-profits. This article was written by Rick Cohen.

  • cohenreport

    Dear Maude: The big three charitable gift funds actually manage donor advised accounts. Basically, the donors know what they want to give to and the national fund managers process their payments to the designated charities. There isn’t really much of a process for pitching your nonprofit to the donors. They maintain their low costs by providing very very little in the way of staff advice to donors. However, the corporate affiliates of these charitable funds do make their own philanthropic grants on occasion, and all three corporations have long histories of charitable engagement in their home communities and nationally. So you could contact them much like you would contact and solicit any other potential corporate grantmaker, but the donors behind the charitable gift funds are somewhat opaque and hard to reach.