CHARLOTTE, N.C. – As Wachovia prepares to become part of Citigroup, Wells Fargo, or perhaps even both, the Charlotte-based bank’s philanthropic-services division and charitable giving face changes.
The acquisition will combine financial powerhouses.
As of the end of 2007, Wachovia employed 121,890 people and earned $6.3 billion on $31.6 billion in revenue.
Citigroup is even larger, employing about 370,000 people and earning $3.6 billion last year on revenue of $81.7 billion.
And then there’s latecomer Wells Fargo, which now is fighting for part or all of Wachovia. Wells Fargo has 160,000 employees and earned $8.06 billion on $39.4 billion in revenue in 2007.
With the announcement of the rescue deal only a few days old, and the outcome now in the hands of the courts, details are few and questions are many.
So until the dust settles, it’s business as usual, Wachovia says.
Wachovia is in the major leagues of charitable giving, awarding a total of $129 million to nonprofits last year through its corporate-giving program and its foundation.
And for the moment, Wachovia’s relationships with grantees are unchanged, says Angela English, the bank’s communications manager for community relations.
“The Wachovia Foundation will continue to honor its commitments to community partners and organizations,” she says.
That includes commitments for 2008, as well as multi-year pledges the foundation has made to groups like Teach for America, the United Negro College Fund and the NAACP.
And with a goal of giving away 1 percent of the prior year’s pre-tax profits, the company had been aiming to donate about $89 million in 2008.
Wachovia will be joining an even larger corporate donor.
New York City-based Citigroup awarded a total of about $150 million last year, with about $95.6 million of that coming from the Citi Foundation.
And Wells Fargo, based in San Francisco, awarded a total of almost $200 million during 2006 and 2007.
It still is unclear what will happen to Wachovia’s corporate-giving efforts after the deal is finalized.
“It’s too early to tell,” says English. “We don’t now yet. I would assume that decision would be made by the end of the year.”
In the meantime, the foundation is still accepting grant applications and operating is a “business-as-usual environment,” says English.
In addition to managing its own philanthropy, Wachovia helps individuals and groups manage their wealth and philanthropic investments.
The bank’s Nonprofit and Philanthropic Services division, which employees 174 people throughout the U.S., manages assets totaling almost $20 billion, says King McGlaughon, senior vice president and managing executive of the division.
Currently, his group manages $12.5 billion in assets for about 4,700 public charities, $3 billion in assets for about 1,600 private foundations and about $3 billion in assets from some 2,000 personal charitable trusts.
And it looks like that operation, which in 2007 generated net revenues of about $85 million, will move to Citigroup as part of the acquisition, McGlaughon says.
He says he is optimistic about the combined operation.
“In my personal opinion, Citi has not had a focused, well-resourced offering in the charitable space,” he says. “I think that means that Citi would look at us as a significant enhancement to its current product and service offering.”
Citigroup also has a philanthropic-services division.
McGlaughon says he is getting questions from clients, as well as employees and staff, but he says that until the dust settles, there are not many answers.
“There’s nothing to indicate that any of the Wachovia businesses will be significantly altered or changed,” he says. “I would assume the hope is to integrate the two groups and keep the best of everything.”