First Union Corp. thinks there is profit to be made in the world of nonprofits.
The $137 billion-asset banking company is beefing up a franchisewide effort targeted at building business with charitable organizations and nonprofit groups.
The company has hired two vice presidents: Beth G. Kernan, who formerly handled the same kind of operation for Fleet Financial Group in Rhode Island, and Charles M. Barber, who specialized in nonprofit work at Mellon Bank. Ms. Kernan will oversee business development in Georgia; Mr. Barber will oversee it in Florida. First Union has six other state directors leading the First Union Charitable Funds Services Group.
In addition to the state directors, First Union is hiring 15 sales agents to beat the streets for nonprofit business. Three are on board so far.
The goal of the Charitable Funds Services Group, a two-year-old arm of the banking company's capital management group, is to take advantage of a boom in charitable giving. The bank intends to push its product offerings to religious organizations and educational, medical, cultural, and historic groups.
"There is a great wealth transfer that is getting ready to take place," said Kenneth R. Brown, senior vice president and managing director of the Charitable Funds Services Group. In addition, said Mr. Brown, the cutback in government funding for some arts and cultural activities has prompted an increase in giving. He said $150.7 billion was given for charitable purposes in the United States last year.
The charitable funds unit contributes about 10% of the revenues derived from capital management. With about $5 billion of assets under management so far, Mr. Brown's unit intends to double its portfolio and revenues in the next three years.
Though investment management is a key service, First Union is also offering assistance with certain administrative functions and planned- giving products. In January, it hired a longtime senior sales consultant from Wachovia Corp. to head its planned-giving product program.
The company sees its primary competitors as Mellon, Fleet, and Wachovia, all of which have units dedicated to charitable funds services, said Mr. Brown.