Charity Bank secures £1 million capital from two foundations
Howard Lake | 13 February 2006 | News
Charity Bank, the world’s first registered general charity and authorised bank, has secured £500,000 each from Esmee Fairbairn Foundation and Northern Rock Foundation as capital to underpin its growth.
The funding comes in the form of 10 year subordinated convertible loan stock on which the bank will pay 4% per annum.
For the next five years this will count towards the capital Charity Bank needs to support its growing lending business.
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The investments were a highly innovative capital transaction, and a first for the UK outside the public and private sectors, according to Charity Bank. They will enable the bank to extend its finance to more social enterprises.
Chief Executive of Charity Bank, Malcolm Hayday, explained the investment. “If community development finance is to move from the margin to the mainstream in the UK, it has to be adequately capitalised”, he said. “The ability to attract capital from socially motivated individuals, trusts and institutional investors is a major challenge for all of us”, he added.
Fiona Ellis, Director of Northern Rock Foundation, explained the reason for their support: “Charity Bank has offered the Foundation a welcome opportunity to invest some of our reserve in direct pursuit of our mission. We are delighted to be able to use our resources in as many ways as possible to help charitable organisations.”
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.