What do banks offer in terms of philanthropy services and what are the benefits for both bank and client? Caroline Hartnell spoke to some of the leaders in this field: Mario Marconi at UBS, Mark Evans at Coutts, Philippe Depoorter at Banque de Luxembourg and Nathalie Sauvanet at BNP Paribas.
What does BNP Paribas offer its clients in the way of philanthropy services?
BNP Paribas Wealth Management, the international private banking branch of the Group BNP Paribas, offers two solutions. One is to donate to our foundation; the second is philanthropy advice. I meet each client personally along with our network of philanthropy advisers, and work out with them which is better.
The first solution is a client-dedicated foundation called Fondation de l’Orangerie. This is usually used by clients who have never given before – in our first year, more than two-thirds of donors. I analyse with them why they haven’t given previously. One reason is that they feel lost among all the NGOs and don’t know who to give to. Also, they often dislike the idea of money ‘lost’ – their word not mine – in structural costs.
So we select projects – not NGOs, and no more than eight to ten – and they can see the research we’ve done. We have experts on the board who have the right to veto projects. We also monitor them, so donors can see what their gifts achieve. One of our clients gave €20,000 to a project for training Indians in Ecuador for sustainable agriculture. We were able to give them a personalized report including a photo of the laboratory in an agriculture college which their money built.
Can donors set up a donor advised fund or umbrella foundation within the foundation?
It’s possible, but on the whole we don’t encourage it – though donors can earmark funds, as with the €20,000 mentioned above. I prefer to offer another solution like setting up an independent foundation or establishing a foundation within King Baudouin Foundation or Fondation de Luxembourg or similar.
Actually, it’s a bit more complicated than that. In fact, there are two Fondations de l’Orangerie, one in Switzerland and one in France. The French one is established under the aegis of Fondation de France; it has no legal personality so cannot shelter other foundations. The Swiss one is a totally independent public utility foundation, and we have a few clients who have their own foundations under its aegis.
Who manages the assets of Fondation de l’Orangerie?
Fondation de France offer two possibilities for sheltered foundations: the assets can stay with them or with the donor. For the sake of good governance, we chose the former for the French foundation. For the Swiss one, being of public utility, governance is controlled by a federal Council of Foundations, so the bank manages the assets.
What about the second, tailormade solution?
As soon as the client wants to do something different, we switch over to the tailormade solution, which is ‘classic’ philanthropy advisory services. But setting up the client’s own foundation isn’t necessarily the main focus. Entrepreneurs in particular are often more interested in how to get involved themselves. Recently I’ve had several clients in a row – entrepreneurs between 40 and 50 who’ve sold their businesses – saying they’re looking for an NGO in a very early stage of development to which they can bring their abilities, managerial strategies, and key to success.
Is there any conflict of interest over advising directly?
We have no worries. First, we have a very rigorous due diligence process, taking six to eight months. Second, we never recommend one charity. We begin with a pool of 100, then reduce to 20. Then we work with the client to reduce this to five.
When did you start offering philanthropy advice at BNP Paribas? And why?
The bank had been thinking about it since the end of 2005, but we began to offer the whole package only in 2008, first in France and Switzerland, then Luxembourg. Later this year, we will launch it in Belgium.
Wealth management is about helping clients to protect, manage and develop their assets. You have to offer services in addition to financial services, to distinguish yourself from competitors and to serve the client better. Twenty-five years ago we launched advisory services to help clients invest in the arts, real estate and wine. In 2005 philanthropy looked like the next thing, and other banks were beginning to do it. Around this time François Debiesse, CEO of BNP Paribas Wealth Management, was with a client who put a very large cheque on the table saying, ‘I want to give this to good causes but I don’t know how to do it. You’ve been my bank for the last 20 years. I’ll let you manage it.’ At that point we had no relevant service. Debiesse said, ‘When we have a client requirement we have to meet it.’ That’s how our philanthropy offering started.
1 Initially, the bank wanted the foundation to be set up in Switzerland. Later a new French law offered donors certain fiscal advantages, which the Swiss foundation couldn’t offer to French taxpayers, so a foundation was set up in France to do so.
Nathalie Sauvanet is Head of Fondation de l’Orangerie and Philanthropy Advisory at BNP Paribas Wealth Management. Email email@example.com