By Todd Cohen
GivingCapital, a New York City firm that markets a Web-based system that financial institutions use to offer donor-advised funds to clients, is in negotiations with several parties that have made offers to buy the firm.
“We’ve received several offers to buy the company and are in the process of final negotiations,” says CEO Chris Blunt. “I anticipate we’ll close in the next 30 days.”
Formed in 1999, GivingCapital employs 26 people, double the total two years ago, and has a client list that includes the American Bar Endowment, American Express, Bank of America, Credit Suisse First Boston, Fiduciary Trust, Franklin Trust, J.P. Morgan Chase, Legg Mason Trust, Morgan Stanley and Northern Trust.
GivingCapital’s strategic partner, the $420 million-asset National Philanthropic Trust in Jenkintown, Pa., handles fiduciary tasks for most of the firm’s financial-services clients. Those tasks range from the approval of charities supported by the donor-advised funds to development and oversight of investment policies.
Blunt says GivingCapital has been open to a sale or merger because it is too small to handle all its potential business, and has had to turn down business from financial institutions.
The firm considered looking for venture-capital investors but found the slumping economy had made terms of a possible deal “too Draconian,” Blunt says.
“Given the opportunities in front of us and who our clients are, we felt the best thing for us at this juncture was to get a big brother behind us,” he says.
GivingCapital, which last year sold its online-fundraising business to GetActive in Washington, D.C., after having signed up as many as 400 clients, has just launched a new Web-based product that lets donors create pooled-income funds, which are similar to charitable remainder trusts.
The firm will offer the product to its financial-services clients to offer to their customers, who can use it to create trusts in which they put cash or appreciated assets such as stock, collecting dividends and interest during their lifetimes and leaving the principal to a charity at their death.