Dreyfus, the cash and liquidity management subsidiary of the Bank of New York Mellon, launched a new share class on Sept. 26 aimed at helping institutional investors meet their philanthropic goals by donating money to charities of their choice.
The newly created SPARK shares will be offered through Dreyfus' flagship money market fund, the Government Cash Management fund, which has $115 billion in assets under management.
Through SPARK shares, clients with a minimum $75 million investment can select an eligible charity to receive an annual donation representing 10% of Dreyfus' net revenue based on the client's average balance. SPARK shares clients will be able to select up to five charities to divert donations to, provided they meet the minimum investment for each additional charity.
Institutional interest for the SPARK shares has already poured in, with $1 billion invested from inaugural investors, including Jeffries, Macquarie Group and Protective Life, ahead of SPARK shares' launch.
Stephanie Pierce, CEO for Dreyfus, Mellon and Exchange-Traded Funds at BNY Mellon Investment Management, said that the firm was also in talks with other institutional investors, including corporate treasurers, consulting firms, university endowments and at least one state treasurer she declined to name.
Pierce said that the idea for SPARK shares was a natural outgrowth of another philanthropic effort at Dreyfus, the BOLD shares program. BOLD — an acronym for Black Opportunity for Learning and Development — was launched in 2022, and through a similar mechanism to SPARK shares allowed Drefyus' clients to make donations to a tuition-assistance grant program at Howard University, a historically Black research institution.
"As we talked to clients, many of them said 'Gosh, I love what you're doing. There's something in my community that I care very deeply about, if there's a way that you could direct the payment towards something that's more in my wheelhouse … that would be very interesting,'" Pierce said. "So we went and thought about that."
While she's excited at the possibility of helping clients do good, the creation of SPARK isn't tied to ESG investing.
"It's really not (about ESG)," Pierce said. "It's about what matters to the client."
It's also something Pierce anticipates will be helpful to BNY Mellon. She said the launch of SPARK shares fits seamlessly into the firm's internal "One BNY Mellon" initiative which, similarly to Goldman Sachs' "One Goldman Sachs," is aimed at making the firm a more integrated, one-stop shop for its clients.
"We're only making this share class available to clients who come in through the walls of BNY Mellon," Pierce said. "You can only get SPARK and BOLD here … and so, it's been a really nice way to bring clients into BNY Mellon broadly that do no business with us at all, who have just said, 'Gosh, I really like you guys, but I really like that, how do I access it?'"
