WINSTON-SALEM, N.C. — While it could take them more than a year to completely consolidate, the charitable-services groups at Wachovia and Wells Fargo have begun sharing information about their respective strategies and the scope of their operations.
And in the wake of the Dec. 31 merger between the two banks, business continues as usual at Wachovia Trust Nonprofit and Philanthropic Services and at Wells Fargo’s Charitable Management Group, their top executives say.
“The team is intact and nothing has changed in terms of products, services and staff,” says H. King McGlaughon, managing executive at Wachovia’s charitable-services operation, which is based in Winston-Salem.
Michael P. Vinyon, Minneapolis-based national director and senior vice president for Wells Fargo’s charitable-services operation, says the “goal of this merger is to make it as smooth as possible and have as a result the best of the two organizations.”
For the time being, the two executives say, their nonprofit and philanthropic-services clients and customers will continue to see the respective banks’ names in the marketplace.
With over 200 employees focused on charitable services on a daily basis, Wachovia Trust Nonprofit and Philanthropic Services serves 4,700 clients and administers or manages $12 billion in charitable assets, McGlaughon says.
While the value of those assets is down from nearly $13.5 billion in the first quarter of 2008 in the face of the decline in the capital markets, he says, Wachovia’s charitable services in 2008 retained 98 percent of its clients and generated roughly $85 million in revenue for the Charlotte-based bank.
That represented a revenue increase of 10 percent from 2007, when revenue grew 20 percent compared to 2006.
This year, charitable services aims to grow revenue another 10 percent, he says.
Client retention last year was “significant given all the ups and downs that have been going on in the financial-services industry,” McGlaughon says. “Our business is strong and continues to grow.”
Vinyon says the charitable management group at San Francisco-based Wells Fargo manages or administers roughly $18.9 billion in assets.
Saying the two banks have taken different approaches to providing charitable services and structuring them within their organizations, Vinyon declined to disclose other data until the two groups can share information.
Until the merger took effect, he and McGlaughon say, the two groups were competitors and were not permitted to exchange information.
“Based on a review of our respective businesses, we will take the best practices and move that forward,” Vinyon says.
Integration of the two groups, which appear to be similar in their product mix and clients served, could take place late this year or even next year or later, he says.
He and McGlaughon both say they do not know who will oversee the merged charitable-services operation.
“The main thing right now,” McGlaughon says, “is that my group is very focused on continuing to do what we’ve been doing and not making any changes in the way we do it.”
In addition to its key goals of building and growing its endowment-management business for nonprofits, its private family foundation business and its planned-giving business, each of which represents roughly one-third of its revenue and its clients, McGlaughon says, Wachovia has just introduced a new product that lets individuals and families create donor-advised funds.
Wachovia also is working with clients to help them identify best practices, whether for giving or fundraising, in coping with the recession.
Vinyon says Wells Fargo is seeing greater client interest in the effectiveness and impact of their charitable donations and gifts.
“We’re seeing a lot more donor-directed giving and a lot more interest in the tools that can help them make sure the interest they hope to achieve through their giving is being met,” he says.
The merger combines two organizations that provide competitive charitable products and services for clients, and that also are philanthropic, Vinyon says.
Wells Fargo contributed over $200 million in 2006 and 2007 combined, he says.
Wachovia contributed $94 million in 2006, $108 million in 2008 and $107 million in 2008, the company says.
“The coming together of these two groups provides a pretty compelling value proposition,” Vinyon says, “for philanthropists, nonprofits and the communities we serve.”