Charity Bank

World’s first general charity that is also an authorised bank

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GB United Kingdom
Web http://www.charitybank.org/
Maturity

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About the project Edit

Charity Bank is the world’s first general charity that is also an authorised bank. The bank commenced business in 2002, following a 7 year pilot loan fund. 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 the only bank that uses 100% of its depositors’ savings to support charities, voluntary organisations and social enterprises that address society’s needs.

Themes

In what ways is this project unique and creative? Edit

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. Charities and other social profit organisations often focus on short-term, project-based philanthropic fundraising rather than a wider, more holistic approach to strategic financing. But in order to survive in today's climate - increasing competition for grant funds and static levels of charitable giving - many social profit organisations will have to develop a more businesslike approach to finance. Yet many of these organisations lack the information they need about the wider funding and finance market to make decisions about their long-term future. Without access to a range of financial tools these organisations may have to delay or even postpone effective responses to social issues, such as exclusion or poverty. That's where Charity Bank comes in.

What is the social value of this project? Edit

Charity Bank provides affordable loan finance and advice to enable charities, community associations, voluntary organisations, community businesses and social enterprises across the UK to grow. Charity Bank often lends where banks or building societies either will not make a loan at all, or will only do so on unaffordable terms. The lending is complemented by early stage advice to prospective borrowers and by continuing post investment support.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). The bank generally considers loans for £5,000 to £500,000 directly itself. For larger sums the bank may propose working with others to help meet the client's 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.

What is the potential of this project to expand and develop? Edit

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 invests 100% of its depositors’ money in supporting charities and communities, money that depositors can then get back. In this sense, the model can be replicated in other countries and other jurisdictions.

What was the triggering factor of this project? Edit

What is the business model of this project? Edit


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