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_____________________________________________
Philanthropy Today
$370-Million Gift
Establishes
Wachovia Endowment
Golden West Financial
donated $370-million to the
charitable branch of the
Wachovia Corporation just
before the two companies
merged, reports The
Charlotte Observer. The
gift not only established an
endowment for Wachovia's
charitable arm, but also
saved Golden West
$130-million in federal
taxes.
Last year, Wachovia donated
approximately $65-million to
its Wachovia Foundation.
_____________________________________________
The Charlotte Observer
editorial 10-2-2008
Create endowment to mitigate
bank loss
Use $200 million at Wachovia
Foundation to salve our
wounds
Posted: Thursday, Oct. 02,
2008
A matter of crucial
importance has been
overlooked in Wachovia's
sale to Citigroup: the fate
of a huge sum of money at
the Wachovia Foundation.
It should be used to help
the Charlotte region. An
endowment created from those
assets would provide
millions of charitable
dollars every year in
perpetuity for this wounded
community. If nothing is
done, the money could be
scattered around the country
and used up in a year or
two.
Some quick background: The
Wachovia Foundation is a
private non-profit, separate
from but generally funded by
Wachovia bank. The
foundation gave away about
$129 million last year
across the country. About $8
million of that went to the
Charlotte area, but the
typical amount here is a
good bit less.
The foundation had $377
million at the end of 2006.
It has about $200 million
now.
That money is governed by a
nine-member board of
directors made up of
high-ranking Wachovia
executives. Citigroup did
not gain authority over the
foundation when it bought
much of Wachovia.
No one has yet decided what
happens to that $200
million. Where will it go?
If Citigroup takes control
of it, it would likely be
spent across the country,
and the Charlotte area would
get a relatively small
amount. If the new Wachovia
Corp. maintains control and
operates it the way it has
in the past, the money will
be granted in short order
and the smaller Wachovia
would not be able to
replenish it at the level
the old one did.
The foundation's board
should adopt a better
solution: a private
endowment set up to benefit
the Charlotte area. Imagine
the good that could be done
with that money. An
endowment with a corpus of
$200 million could make
about $10 million in grants
per year, perhaps forever.
That's transformational
giving for a region like
ours.
As the city that is taking
this hit on the chin, we
deserve the help. We need
this to offset the civic
loss we're sure to face from
the resulting job cuts and
corporate downsizing.
Citigroup can continue its
philanthropy through its own
foundation.
There is precedent for such
an arrangement. When
Wachovia's predecessor,
First Union, bought
Philadelphia-based
CoreStates in 1998, it set
up a $100 million foundation
to benefit the Philadelphia
area as part of the deal.
That foundation, now known
as the Wachovia Regional
Foundation, lives on and
plays a major charitable
role in the 16-county
Philadelphia area to this
day.
We've written about how this
slow economy and questions
surrounding the United Way
have endangered help for our
most fragile neighbors when
they need it most. With the
Wachovia Foundation, we have
an opportunity for an
unparalleled invigoration of
philanthropy in this
community that we can't
afford to waste.
A matter of crucial
importance has been
overlooked in Wachovia's
sale to Citigroup: the fate
of a huge sum of money at
the Wachovia Foundation.
It should be used to help
the Charlotte region. An
endowment created from those
assets would provide
millions of charitable
dollars every year in
perpetuity for this wounded
community. If nothing is
done, the money could be
scattered around the country
and used up in a year or
two.
Some quick background: The
Wachovia Foundation is a
private non-profit, separate
from but generally funded by
Wachovia bank. The
foundation gave away about
$129 million last year
across the country. About $8
million of that went to the
Charlotte area, but the
typical amount here is a
good bit less.
The foundation had $377
million at the end of 2006.
It has about $200 million
now.
That money is governed by a
nine-member board of
directors made up of
high-ranking Wachovia
executives. Citigroup did
not gain authority over the
foundation when it bought
much of Wachovia.
No one has yet decided what
happens to that $200
million. Where will it go?
If Citigroup takes control
of it, it would likely be
spent across the country,
and the Charlotte area would
get a relatively small
amount. If the new Wachovia
Corp. maintains control and
operates it the way it has
in the past, the money will
be granted in short order
and the smaller Wachovia
would not be able to
replenish it at the level
the old one did.
The foundation's board
should adopt a better
solution: a private
endowment set up to benefit
the Charlotte area. Imagine
the good that could be done
with that money. An
endowment with a corpus of
$200 million could make
about $10 million in grants
per year, perhaps forever.
That's transformational
giving for a region like
ours.
As the city that is taking
this hit on the chin, we
deserve the help. We need
this to offset the civic
loss we're sure to face from
the resulting job cuts and
corporate downsizing.
Citigroup can continue its
philanthropy through its own
foundation.
There is precedent for such
an arrangement. When
Wachovia's predecessor,
First Union, bought
Philadelphia-based
CoreStates in 1998, it set
up a $100 million foundation
to benefit the Philadelphia
area as part of the deal.
That foundation, now known
as the Wachovia Regional
Foundation, lives on and
plays a major charitable
role in the 16-county
Philadelphia area to this
day.
We've written about how this
slow economy and questions
surrounding the United Way
have endangered help for our
most fragile neighbors when
they need it most. With the
Wachovia Foundation, we have
an opportunity for an
unparalleled invigoration of
philanthropy in this
community that we can't
afford to waste.
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