Charities Turned Away by Banks

Friday, July 24th, 2009

Planned giving programs are steadily gaining popularity with donors and their charities.  However, banks that service them are slowly turning away.  In fact, there are already key banks that retreated from this financial management area.  They refuse to take charities that have less that $5 million (some even $1 million) in assets.  And there are some that are dropping clients who do not make the cut.

This move is squeezing the smaller organizations, wherein many of them are dependent on banks to manage complex programs and they rely on planned giving vehicles to get donations.  Today, over 50 charities scramble to find new banks since BNY Mellon Wealth Management gave clients a deadline (until Sept. 1) to select another manager.  BNY Mellon is one of the biggest bank players in the investment arena of planned giving.  Likewise, other banks like Wachovia and Merryll Lynch that have longtime philanthropic practices are now folded into merged operations.

A few charities try to join forces in order to gain back clout with banks.  A New York attorney serving on the professional advisory committee of Charities Support Foundation, Andrew Grumet said, “These days, you need to have real money to gain a financial institution’s attention.  That’s just the harsh reality.”

Tags: Andrew Grumet, attorney, banks, BNY Mellon Wealth Management, charities, Charities Support Foundation, donors, Merryll Lynch, New York, Planned Giving, Wachovia
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