Lloyds TSB Foundation for Scotland stops accepting new applications
Howard Lake | 14 October 2009 | News
The Lloyds TSB Foundation for Scotland, one of the largest grantmakers in Scotland, is closing its door to new applications for grants “for the foreseeable future” in a move which could deprive hundreds of charities of at least £6 million a year.
The suspension follows predicted losses at Lloyds Banking Group, which shares 1% of its pre-tax profits amongst the four Foundations that cover the UK. “There are virtually no monies due to the Foundation in the coming year”, according to the Foundation for Scotland.
The Foundation will, however, honour its existing commitments to charities and will make final awards in December as planned.
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The closure also follows the failure of talks over nine months between the Foundation and Lloyds Banking Group over how to enable the Foundation to continue its work until the Group returns to profit.
According to the Foundation, the Group has offered to make funding available for the next year but only if the Foundation agrees to cede its independent status and accept a reduction in the terms of the covenant between it and the Group.
Mary Craig, Chief Executive of the Foundation, explained: “Lloyds Banking Group has put money on the table to get the Foundation through the next few years until the Group returns to profit.
“That is to be welcomed but, unfortunately, that has come with a significant condition attached that would seek to alter the covenant immediately, leading to future funds reducing from a share of 1% of profits to a share of 0.5% of profits. There are also conditions that we believe would lead to the end of the Foundation’s independent status, such as the Group choosing where the money would go in future”.
She added that the charity’s legal and financial advisers have reported that “what has been offered is not in the best interests of the Foundation and that Trustees should therefore not agree to this”.
She also pointed out that the Scottish Government had recently set up a £1.7 million fund for charities that have been hit by the recession. “If the Foundation stops its activities”, she said, “this money will simply be filling part of the hole we will leave, not providing the additional help as was intended.”
The Group told Third Sector that it was disappointed that the Scottish foundation had chosen not to continue discussions. The three other Foundations are still in discussions with the Group. “Our intention is to agree with all four foundations a mutually satisfactory accommodation that is realistic, fair and durable,” said the Group’s statement.
Since it was established in 1985, The Lloyds TSB Foundation for Scotland has made over 12,000 awards to charities, worth almost £85 million.
www.ltsbfoundationforscotland.org.uk
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.