| November 04, 2009 |
| BofA Overhauls Philanthropic Products |
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(Dow Jones)--To gain market share and compete with top players in the
donor-advised fund space, Bank of America Merrill Lynch is overhauling
its donor-advised funds and other philanthropic product offerings. The company announced a host of new capabilities to an expanded group of philanthropic investors and their financial advisers Wednesday, including reducing the minimum amount to open a donor-advised fund to $5,000 and creating an online portal to view investment options, track balances and work with financial advisers on a giving strategy. Offering these services to clients of Merrill Lynch advisers and U.S. Trust, as well as lowering the price point of entry, "gives us scale and make these products accessible to a broader population," said Cary Grace, national philanthropic management executive for Bank of America Merrill Lynch. Currently, Bank of America Merrill Lynch Philanthropic Management distributes more than $300 million in grants to charitable organizations annually on behalf of its clients, and serves as trustee, co-trustee or grant-making agent for more than 30,000 philanthropic accounts. The company would not disclose the donor-advised funds' assets under management, but experts say they do not yet compare to those at bigger outfits such as Fidelity Investments' Fidelity Charitable Gift Fund and Schwab Charitable, a unit of Charles Schwab Corp. (SCHW), with $3.6 billion and $1.7 billion under management as of August, respectively. With resources coming from its acquisition of U.S. Trust in 2007 and Merrill Lynch in 2008, the Bank of America Charitable Gift Fund is able to accept a wide range of specialty assets, such as residential and commercial real estate, farmland, timberland, oil and gas properties, collectibles, and private businesses at the time of liquidation, and convert them into cash donations. "Particularly in this economic environment, wealthy donors are looking for innovative ways to give beyond cash and stock, and many specialty assets were less affected by the downturn," said Gillian Howell, national private philanthropy executive for Bank of America Merrill Lynch. The Merrill Lynch Community Charity Fund will also be available to donors looking to create a donor-advised fund in concert with a community foundation and a Merrill Lynch financial adviser. "This fund is particularly suitable for donors who are looking to be philanthropic locally but haven't identified the charities they want to support," Howell said. Separately, Bank of America's Foundation Services are now available to Merrill Lynch clients who are looking for broader services ranging from back office and management to a family foundation to simply drafting a mission statement for family giving. Currently, philanthropic management provides investment and philanthropic services to more than 10,000 individuals, foundations, endowments and other nonprofit organizations with more than $55 billion in assets. Grace said the company conducted internal training for financial advisers around the new products, as well as philanthropic research. "We wanted to make sure our advisers are up to speed with the most efficient and effective strategies, particularly as donors head into the fourth quarter when most of the giving occurs," she said.
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