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Last update : January 2007
Overview
Charity Bank is the world’s first general charity that is also an authorised bank.
We commenced business in 2002, following a 7 year pilot loan fund, Investors in Society.
The Bank was born out of the mission of the Charities Aid Foundation, CAF, to increase the substance of charity by opening
up a new stream of resources.
A pioneer in the field of Community Finance, Charity Bank has agreed to lend over £50 million to more than 500 charities, unlocking a further £85 million of finance from other sources for charity. In addition £50 million of finance has been brokered into the commercial banking sector. Charity Bank is profiting communities by transforming and growing the essential facilities and charitable enterprises that healthy communities depend upon.
Structure and Activities
Charity Bank is a unique organisation: a fully authorised bank,
regulated by the Financial Services Authority (FSA), and a registered general charity,
regulated by the Charity Commission.
We provide a bridge between people who want to use their surplus funds for the benefit of society and those enterprising community organisations that are best placed to deliver solutions.
We achieve this simply by using our philanthropic capital base to leverage deposits on terms beneficial to charity, enabling us to make loans to charities and other community enterprises. The lending is complemented by early stage advice to prospective borrowers and by continuing post investment support.
By achieving this simple aim, Charity Bank also seeks:
- to connect the needs of society with the world of finance by using financial tools and products for the common good
- to enable safe and easy charitable investment, as well as giving; creating a culture of charitable financing in parallel with fund raising
- to challenge each one of us to think about the way we use our money
- to challenge perceptions of charity as consumers rather than creators of social capital
- to demonstrate to charities that finance can help them become more effective more quickly.
Much of charity is still targeted at making poverty history. Value investors such as Charity Bank and other members of Inaise also seek to confront the other issues of our time such as the consequences of globalisation, inequitable trading practices, and how to provide for a socially just society.
Charity Bank is a company limited by shares with charitable status. Ordinary voting share capital is held by CAF. Non-voting B preference shares are held by charitable trusts and foundations including Baring, Esmee Fairbairn, Northern Rock, Nuffield, Mercers Charitable Foundation, Trust for Education, Tudor, NCVO, Serve All Trust, Phillips Fund, Prairie Trust, Natwest Community Fund and The Vodafone UK Foundation. Non-voting C preference shares are held by Barclays Bank.
Just Credit
Charity Bank lends to registered or exempt charities, community associations, voluntary
organisations, community businesses, social enterprises and social landlords (as long as
the loan is exclusively for charitable purposes).
We generally consider loans for £5,000 to £500,000 directly ourselves. For larger sums we may propose working with others to help meet your need. Loans are generally for periods from 6 months to 10 years, with loans for periods up to 25 years for loans secured on property.
We do not relate our interest rates to bank base rate. We charge an interest rate that is generally between 5% and 7% per year irrespective of base rate. We also make a one time charge, to contribute towards our administration costs, of 1% of the loan amount.
Just Deposits and Savings
Charity Bank can only fulfil its mission to provide long term sustainable funding for
charitable purposes if it can raise deposits from individuals, companies and other
organisations: from people and organisations who want to use their surplus funds, not for
great financial gain but because they want to see their money being reinvested in
communities for the Common Good.
Charity Bank offers a range of tailor made deposit accounts; from Small Steps account designed for young savers, through fixed term or notice accounts and regular savings accounts.
Loan Case Studies
PEOPLE, Radstock, North East Somerset
PEOPLE was formed because of a lack of help and advice to those prisoners who return to
rural areas in Bath and North East Somerset for resettlement. It is continually expanding,
helping with accommodation, employability, benefit claims, anger management problems,
parenting skills and training. It wished to acquire permanent accommodation to house its
beneficiaries and found a suitable 3 bedroom semi-detached house. Charity Bank provided a
loan of £100,000 to fund the purchase.
Westminster Children’s Society, South West London
Over the past 100 years WCS has continued to meet its founding principles, responding
to changing needs and expectation, but always placing the child at the centre by providing
childcare, training and family support. A need for more childcare places had been
identified. Charity Bank provided a loan of £300,000 to assist with property repairs and
improvement, increasing WCS’s provision to 60 places.
Headcorn Village Hall, Headcorn, Kent
Headcorn village has a population of 4,800 with an active community spirit. The village
hall was too small to accommodate all their community activities. To cater for current and
future growth, the Headcorn Village Hall charity has built a new hall and renovated an
historically important Victorian schoolroom, joining them together to form an integrated
facility. This was a very large project costing in excess of £1.3m and, as part of a
funding package, Charity Bank agreed to lend £400,000 split between bridge and long term
finance.
Key figures
million EUR |
Dec 2005 |
Dec 2004 |
Dec 2003 |
Dec 2002 |
April 2002 |
| Total balance sheet | 57.1 | 23.5 | 16.2 | 12.9 | 9.3 |
| Capital | 7.5 | 5.9 | 6.4 | 6.1 | 6.4 |
| Deposits | 49.6 | 20.9 | 17.1 | 6.8 | 2.6 |
| Total outstanding loans | 16.3 | 11.7 | 8.8 | 6.4 | 4.9 |
million £ |
Dec 2005 |
Dec 2004 |
Dec 2003 |
Dec 2002 |
April 2002 |
| Total balance sheet | 38.6 | 18.6 | 16.2 | 8.9 | 6.4 |
| Capital | 5.1 | 4.1 | 4.4 | 4.2 | 4.4 |
| Deposits | 33.5 | 14.4 | 11.8 | 4.7 | 1.8 |
| Total outstanding loans | 11.0 | 8.1 | 6.1 | 4.4 | 3.4 |
