If you look at the “50 Largest Corporate Foundation by Total Giving, 2006” in the Gain Knowledge section of our web site, you will see that five of the top 10 most generous corporate foundations are connected with financial institutions: The Bank of America Charitable Foundation, The JPMorgan Chase Foundation, Citi Foundation, The Wachovia Foundation, and The Wells Fargo Foundation.
Because of the roles that banks play in our communities, mergers and buyouts have a definite effect on our local nonprofits. Georgia and the rest of the Southeast have seen their share of bank mergers. Bank of America, based in Charlotte, NC, has become the second largest bank in the U.S. via a series of acquisitions and mergers. The merger of Georgia’s First Atlanta Corporation and Wachovia in the 1980s and subsequent changes to interstate banking regulations in the 1990s made the Winston-Salem, NC-based Wachovia a major player in Georgia’s financial services sector. When it merged with Charlotte, NC-based First Union in 2004, Wachovia became the fourth largest banking institution in the U.S.
Decades ago, a bank’s community interests were closely tied to its president’s interests. Now, banks and other corporations tend to be more strategic in their giving. Regardless of how they give, public opinion is important for them because they rely on the goodwill of consumers. However, when banks merge and change where their headquarters are located, the geographic focus and fields of interest of their philanthropic activities sometimes change. Their giving may increase or decrease.
While merged banks and corporations often promise to maintain community involvement and previous levels of giving, nonprofits are frequently skeptical…and wary. So it is with this week’s Wall Street upheavals and the nation's ongoing credit and financial crisis. Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors, predicts that the “disappearance of Bear, Lehman, Merrill, and maybe AIG -- with who knows how many more to follow -- is going to have a big impact on philanthropy in New York City and the tri-state area.” Since most of these firms’ foundations were national funders, that impact likely will extend to the rest of the U.S. (Read the whole interview at PhilanTopic’s Sept. 16, 2008, post. PhilanTopic is a blog about the changing field of philanthropy and is a service of the Center’s Philanthropy News Digest (PND).)
For another view, National Committee for Responsive Philanthropy (NCRP)'s 2007 report, Banking on Philanthropy, examines giving levels of several large banking institutions before and after their mergers, including several with a major presence in Georgia: Bank of America, SunTrust, Wachovia, and Washington Mutual. Among its findings: Although philanthropic giving by these banks actually increased after mergers, some evidence suggested a shift toward funding national organizations, with a corresponding drop in local giving. However, there was also “a shift across regions, with the South being a clear winner of increasing bank philanthropy among the banks studied.”
News of these financial casualties' impact on the nonprofit sector will continue to emerge in the following weeks. Some related articles from PND:
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What has been your grantseeking experience before and after acquisitions and mergers among banks and other corporations? Do you think banks and corporations headquartered in other states give more there than in those where they do business? Are you shifting your fundraising strategies because of what's happening on Wall Street? Share your comments below.
Pattie Johnson, Director, and Sandy Pon, Reference Librarian, Foundation Center-Atlanta
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