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Monday, October 5, 2009

Barclays rolls out ETF-based charitable-giving program

Donors will be able to use 25 different iShares offerings to customize their investments

Barclays Global Investors has launched the iShares Charitable Giving Program, which offers clients access to donor-advised funds using pools of its exchange-traded funds.
It's thought to be the first time that a major fund firm has offered a charitable-giving program using only ETFs, said Eileen Heisman, president and chief executive of the National Philanthropic Trust, a national donor-advised fund program and charity with $660 million in assets under management.

“To my knowledge, it's very unique among [large financial] firms,” said Ms. Heisman, whose organization is administrating the program. “And because ETFs are so low-cost, it's going to have a very competitive cost structure.”

Donors will be able to select from several risk-based investment pools and use 25 different iShares ETFs to customize their investments, Ms. Heisman said. The minimum investment is $25,000.

Barclays has invested millions of dollars in philanthropic projects around the world, Michael Latham, co-chief executive of iShares, said in a statement.

“[The program] will provide a cost-effective and easily accessible way for donors to support charitable causes and establish an ongoing philanthropic legacy,” he said.

Industry officials and financial advisers have said that participating in the philanthropy area is a natural fit for investment firms.

“[Barclays has] an existing client base that believes in their investment strategy, so why wouldn't they want to do that for their clients' philanthropic strategy?” said John Tobin, executive director of the American Endowment Foundation, a national independent donor-advised fund program with $150 million in assets under management.

“This is another resounding sign of support that people want a personalized approach to their philanthropy and to their investment account,” he said. “I think it's the beginning of a number of financial institutions that we will see getting into this.”

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