Wachovia v BofA v Other

[skysdalimit]

Since Wachovia has announced plans for a museum and theater, and over the years BofA has contributed money and land for the city's good, which of these companies, or another company, has been the leader in city philanthropy?

[appatone]

Between BofA and Wachovia I would go with BofA. Also, BofA has recently committed 3/4 of a TRILLION dollars to community development. You don't hear the word trillion thrown around too much. Of course, Hugh was responsible for much of BofA's philanthropic spirit. It is waining under Ken.

[peaceloveunderstanding]

i think that was a misprint. I think it should read 3/4 of a billion. BOAs market cap is only 181 Billion.

[dubone]

it is 3/4 ttttrillion,

http://www.bankofamerica.com/newsroom/pres...20041025.03.htm

It isn't raw cash donation, by the way... i it is loans and other investments.

[peaceloveunderstanding]

how bout they only put it in Charlotte. We could outpace Dubai then.

[murderingmouth]

Now I always thought that the best thing for a business to do was to retain its earnings and reinvest them. That's what creates economic activity and jobs. Throwing corporate cash at charities is one thing I despise (especially if I own stock in such a company - that's my cash they're throwing away!)

If they retained and reinvested their cash rather than throwing it at random special interests, they could create more and better-paying jobs in Charlotte, rather than just more useless "culture". I hate culture...

Darn me and my self-righteous capitalism

MM

[peaceloveunderstanding]

Your right. This looks like PR mischef to me.

[dubone]

it's neither PR nor bad business.

This IS business, as they earn interest on whatever they loan out. The point is, that they agree to do the loans in areas that lead to the health of a community in which they do business. It is a major aspect of winning merger approval. Don't forget, that has always been the purpose of banks... to pool the community assets, draw interest, and reinvest profits in community... draw interest... and reinvest back ...etc. etc. When banks shifted to multinational conglomerates, they must agree to these kinds of things in order to serve a similar purpose, just on a larger scale.

Look at first ward... that was community reinvestment by bank of america... it counted toward their goals... and they probably made quite a bit of money on the venture. Not to mention the soft benefits of building goodwill (a major part of the value of a company) and a place for their employees to live blocks from their workplace.

This isn't charity. This is targeted investments in the undervalued parts of the community, in order to create new value, and make more money.

[murderingmouth]

This isn't charity.  This is targeted investments in the undervalued parts of the community, in order to create new value, and make more money.

<{POST_SNAPBACK}>

Well, there's quite a few studies on whether "social responsibility" PR generates more shareholder value than direct capital investment. Most of those who say Social investments pay off more are sociologists. Most of those who say capital expenditures are better are economists. Ad and PR firms don't are, as long as the expenditures are publicised well .

For instance, when my office "invested" in a $2000.00 coffeemaker, I was shocked and confounded - why not give key employees a small bonus? Why not buy some extra seats at the call center? Why play favorites with employees who would rather sip coffee all day than do their job and buy their own damn coffee?

I, for one, am instantly skeptical of any "investment" when the word "community" is attached to it .

Finally, a good portion of this stuff (globally, not necessarily in Charlotte specifically) is not in the form of loans, but grants. That's not an investment, it's charity, no matter how you paint it. If it's a loan at a preferred interest rate that fails to pay the service fees on the loan, it's still a charity.

I have no problem with charity, I just don't think corporations should engage in it, since it's not their money, but their shareholders' that they're playing with. It baffles me that CEOs that indulge in this stuff aren't kicked out more swiftly...

MM

[dubone]

fair enough...

but in this case, it is one company, and its shareholders who have considered this not only acceptable, but strategic.

Charlotte's downtown was blighted and barren after hours until Mr. McColl and Co. made it a strategic priority to invest in areas like north tryon, west trade, and the first ward. Charlotte, and especially downtown charlotte would not remotely be where it is without that investment.

The big number is PR, but the business model that creates those big numbers has done very well for the bank and the communities in which it does business.

[appatone]

Mr. McColl also worked a little magic in Historic Fourth Ward. That quaint little historic district was over run with whore-houses and drug dens not too long ago. There are of course many people who work to rebuild these areas but if it wasn't for Hugh, and people like him, there would be no real Uptown and there probably wouldn't too much to Charlotte as a whole either.

Just a thought murderingmouth:

If it were not for this type of investment you would probably still be in CA confusing Charlotte, NC with Charleston, WV. But you're here for a reason and so are so many others. So it has worked out well for us but I understand your views as an investor. I just don't feel the same.

[Raintree21]

I'd say its good PR in a way. They give money to revitalize an area, which draws more people in. Bring more people to a certain area and they will spend more money increasing revenue for businesses and increasing loans from a bank. With their increased visability for the project, I'm sure they're getting customers and business. There has to be a benefit for BOA to do this.

[monsoon]

Actually 4th ward was in revival long before McColl took the reigns of the bank.

I don't think either bank should be commended for what they did in DT Charlotte. Remember these are the very institutions that bulldozed down much of the downtown and replaced them with buildings that were very people unfriendly. The fall of downtown Charlotte was at the hands of the banks more than any other institution. Its only been in the last 7-8 years that a turnaround has occured and that is only because the banks have figured out they can make a great deal of money on land they purchased for nothing after the decline occured.

I am afraid their "contributions" now are pricing downtown out of reach of most people so the end result will be anything but a community, but rather an expensive neighborhood with only one or two types of people.

[dubone]

First ward has public housing units... it is baked into the neighborhood to have more than 2 kinds of people (unless we are talking gender here).

The banks provided much of the initial investments for many parts of downtown. The designers and architectal community did the rest. The were community leaders at a time when those designs were in vogue. So even if it might be a little fair to blame them, it is also a little fair to not blame them for the mistakes. They did a lot right on north tryon. Look at it compared to south tryon. I'm not sure i know what aspects are bad about gateway and first ward garden district.

Goodwill is something that businesses must have in order to do business. Enron was a profitable company, even without the sleazy things it did to avoid taxes. BUT no one would trade with them because they lost al their goodwil.

Walmart is an amazingly profitable company, with very consumer friendly pricing policies. BUT it is rapidly losing goodwill because it is putting american companies oob, and paying its works poverty wages. The lack of goodwill costs them customers, zoning battles, and eventually regulatory oversight (hopefully).

McDonalds is amazingly profitable, and makes very very good tasting, consistent, and inexpensive food. But they are rapidly losing goodwill because of the impression that they make people fat and they import food from starving countries, etc.

I won't even mention tobacco companies. er. .. other than that.

Companies and simply organizations of people that work together to create economic wealth and economic profits. BUT, in the modern world, without properly investing in goodwill, the company gains an 'evil' reputation, people stop being customers, and investors stop supporting your stock prices.

The banks are comunity leaders here, and in most cities they do business. They contribute actually charity, and they agree to provide loans to certain demographics of people, and in certain forgotten neighborhoods, in order to increase opportunity for "disadvantaged" people. It buys goodwill, and goodwill brings customers, investors, and regulatory approvals.

[orulz]

Didn't BoA pay for construction of the CATS bus center? Or at least they gave the city a good deal on the loans for building it.

[monsoon]

Didn't BoA pay for construction of the CATS bus center? Or at least they gave the city a good deal on the loans for building it.

<{POST_SNAPBACK}>

In fact they did. And some in the Black community accused them of racism for doing so.

[peaceloveunderstanding]

Whats racist about that?