Philanthropy: How the major financial institutions are helping

August 22, 2011

Ten years ago, you would have been hard-pressed to find philanthropy specialists in most private banking and investment firms.  But today, philanthropic services are a major division of most wealth management operations, offering clients a myriad of investment vehicles and services to do good.

“It was an add-on before, something extra that they did to be kind or nice, but I think it’s now a business magnet for dealing with all different parts of an individual’s wealth,” says Eileen Heisman, CEO and President, National Philanthropic Trust.

“They’re not just dealing with private equity investing or alternative investments or making sure the money is going to the next generation through tax planning – philanthropy has become a central part of relationship management because it’s so much a part of a high-net-worth individual’s life.”

Looking to give back by donating your dollars or expertise? Reuters Money interviewed executives from some of the most prominent financial institutions to see how they stack up in the philanthropic space.

Bank of America

What makes the services unique? Gillian Howell,  national private philanthropy executive with Bank of America, believes it’s the “depth and breadth of our expertise and specialization,” that differentiates the bank from its competition. With 179 people, with an average of 15 years experience each working with high-net-worth and ultra-high-net-worth individuals, they boast a national reach with regional and local expertise.

Along with services for individual investors, BofA also manages institutional philanthropy under the group’s Philanthropic Solutions umbrella. “We’ve got a nice synergy between the two of them that makes them pretty unique too,” she says.

Leader in technology:
BofA’s philanthropy division gives away approximately $300 million in grants annually, making it one of the largest such divisions in the country. The bank understands the importance of streamlining and efficiency.  The Search for Grants website boasts information on more than 120 foundations. Interested parties can search for not-for-profit organizations based on geography, mission and focus — a service they hope to broaden.

“We would [like to]become the behind-the-scenes foundation’s administrator for clients,” says Howell. “If a family foundation wanted to set up a website to receive applications for the foundation, we would be the virtual office behind that, providing all the processing, due diligence and back-office work on those grant applications which would be a huge advantage to our clients.”

BofA is also working on a new program called Internet Grant Application Module, or IGAM, which will allow the acceptance of online applications for discretionary foundations. “It’s such an easy, streamlined way of doing business and moves you from the paper based processing – there can be stacks upon stacks for foundations and grants. The fact that a family or foundation can receive these online as opposed to an 85-page packaged application is real progress.”

Harris Private Bank

What makes their services unique? “Philanthropy is not about how much money you give, it’s about process and attitude,” says Claudia Sangster, director of philanthropy, estate and trust services with Harris my CFO, Inc.

Sangster and her team approach philanthropy from a discovery basis, allowing easy integration to Harris’ other private banking services. “Philanthropy is an equal player at the table with investment advisers, risk managers, the tax compliance side, along with tax planning and estate planning,” she says. “I don’t feel like we’re a step child added to services as an after thought.”

Sangster is part of a team of  advisers, allowing interaction with other key players, “So that we have a great understanding of the client’s wealth and the generations that are involved.”

Multigenerational giving:
Harris’ services are customizable, depending on the needs of an individual and family. “Wealth is one of those things that comes in all shapes and sizes, and families are the same,” Sangster says.

The team is somewhat agnostic in terms of what vehicles and areas of interest are pursued, instead focusing on building a framework for families to establish a legacy and pass on values to younger generations.

“I’m finding our clients are looking for guidance and education in how to be effective grant-makers and how to give collaboratively as a family,” Sangster says.  “It builds their bonds of intimacy and creates a better understanding of each other. Hopefully, they are more able to collaborate on not just philanthropy but all aspects of wealth management.”

Morgan Stanley

What makes their services unique? “A number of years ago, we decided not to have our platform come out of a trust company or the asset-management side of the firm,”  says  Melanie Schnoll Begun, managing director of philanthropic services at Morgan Stanley Smith Barney. “It sits in wealth management and is available for our advisers or their best clients. Unlike many of our competitors, our team is not out there with the mindset that we need to open up a donor-advised account.”

New systems and social media
The firm has recently launched new foundation-management services in an effort to alleviate administrative burden for clients. “The goal with philanthropy is to have fun with it,” says Schnoll Begun, so they are using technology to make running a family foundation simple. “It allows clients to have a wonderful vehicle to give, but not have the burden of running the back office,” she says.

The firm is also creating a social media platform that can be used as a way to connect and learn from other philanthropists. It can also ensure they get the information they need on impact, which Schnoll Begun believes is the number one concern for her clients. “They want accountability and they want timely reporting by the non-profits they’re giving to. Through the social media platform, they’ll be able to make timely decisions on organizations,” she says.


What makes their services unique? Bill Sutton, head of philanthropic services at UBS Wealth Management Americas, believes it’s the firm’s global reach that sets it apart from the competition. “We have philanthropy offices in Zurich, the U.S., Singapore, Australia, Paris, and Hong Kong.  We’ve created a knowledge-exchange platform to bring our clients together to collaborate,” he says.

Their expansive network allows clients new to the U.S. to invest in their heritage countries and facilitates partnering with co-funders around the world. Because of this global reach, UBS was named the best global philanthropy services provider by the Euromoney Private Banking Survey in 2010 and 2007.

Programs that connect:
For the past 10 years, UBS has hosted the Global Philanthropy Forum, which brings together philanthropic thought leaders and 150 of UBS’s wealthiest clients to exchange ideas and develop new approaches to philanthropy. This year’s conference will focus on bridging the wealth gap.

“We try to keep it focused and tight on our client’s interests. We work with over 3,500 private foundations just in the U.S. and well over 15,000 charities, and of course thousands more around the world, so we do a lot of work to connect our ultra-high end clients with their peers,” says Sutton.

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