After years of inertia, more than half of charities changed their bank in 2008, as trust in banks was shaken by the financial crisis.
Charity Finance runs an annual Charity Banking Survey each April, which looks at which banks are popular in the sector, their performance, and how proactive charities are in making key banking decisions.
CFDG is creating a forum to tackle banking issues faced by civil society organisations. Running on a bi-yearly basis, the Charity Banking Forum will comprise of members of the Charity Finance Directors’ Group (CFDG) and representatives from the banking industry.
The Bank of England Monetary Policy Committee, as expected, left interest rates on hold at 0.5 per cent at its January meeting and deferred its decision on whether to expand the asset purchase programme until next month.
Charities which lost deposits following the 2008 collapse of Icelandic bank Kaupthing Singer and Friedlander could recover up to 70 per cent of funds over the next couple of years, according to Dominic Sullivan, Cats Protection’s director of legal services.
The government will commit no more than £75m from dormant bank accounts as initial capital for a Social Investment Wholesale Bank, it announced today in its Pre-Budget Report.
Acevo is leading the formation of a Responsible Finance Coalition of civil society organisations that will lobby the government to force high street banks to lend to people in deprived areas.
ActionAid International is planning to withdraw its business from HSBC because of the bank’s record of working with a company that manufactures cluster bombs and other banned munitions. A report by the Dutch peace movement IKV Pax Christi released last week revealed that HSBC has provided a loan facility and underwritten share and bond issues for the US-based cluster munitions producer Textron, earning it a place in the report’s ‘hall of shame’. Manufacture of cluster munitions (pictured) is illegal in the UK, but earning money by advising companies who manufacture them elsewhere is not.
A coalition of Scottish MPs has called on Lloyds Banking Group to reconsider its decision to halt funding for the Lloyds TSB Foundation for Scotland. Last week, the Foundation announced that it had closed its doors to new grant applications “for the foreseeable future” after failing to reach an agreement on future funding with its main benefactor the Lloyds Banking Group.
In the first of a series of articles, Vibeka Mair examines the reaction from existing social investment retailers to the proposed new Social Investment Wholesale Bank. On 15 July, more than two years after the Commission on Unclaimed Assets made a strong case for a big chunk of the money lying in dormant bank accounts to find its way into the voluntary sector, the government launched a consultation on a proposed Social Investment Wholesale Bank (SIWB).
Naomi House, a charity fighting to recoup losses following the Icelandic banking collapse, has put in a Freedom of Information request to know what conversations Downing Street had with the Christie, whose losses of £6.5m in Iceland were compensated by the NHS North West. Khalid Aziz, chairman of Naomi House, said the charity was keen to know what sort of mechanisms Downing Street had with the Christie.
The government is today launching a consultation on the proposed Social Investment Wholesale Bank, with the purpose of defining how such a bank would operate. Lasting 12 weeks, the consultation presents a range of possible functions for the bank, such as attracting money from other investors and helping to raise funds for existing social investors.
It’s been a tough time for charity finance directors over the last year and the next 12 months show few signs of respite. Against a backdrop of economic recession, charities are suffering from low or no interest on bank deposits, falling yields on investments and downward pressure on funding sources. As income falls, or at least threatens to, cost control is key according to the findings of our inaugural survey of the finance function.
A CAF Bank survey of 280 charities has revealed that 42 per cent are struggling to deliver services because of the low interest rates.
Heather Lamont asks whether the recent stock market revival reflects a sustainable economic recovery, or a return to boom and bust. After an extended period of share prices declines, especially over the winter of 2008-09, this spring equities at last began to show an improvement. What investors want to know now is whether the recent rally marks the beginning of a sustained recovery, or whether we should be bracing ourselves for a relapse.
Charities will struggle with a legal challenge against the government for refusing compensation for money lost in failed Icelandic banks, according to charity law experts. Save Our Savings, a coalition of 30 charities fighting to retrieve deposits lost in Iceland, is seeking legal advice from lawyers on the strength of a case against the government and the Financial Services Compensation Scheme (FSCS) for not refunding charities.
The government will not compensate charities which have lost deposits in Iceland as it would hinder the support for other charities struggling through the recession. The move is a snub to the Treasury Select Committee who recommended full compensation for charities affected by the Icelandic banking crash, as well as better clarification on the protection available for charities under the Financial Services Compensation Scheme (FSCS) and a look at the classification of charities as retail or wholesale depositors under the FSCS.
Charities fighting to recover deposits lost in the Icelandic banking crash will find out whether the government will compensate them on Friday. The government has been urged to recompense all charities that lost money in Iceland by the Treasury Select Committee in a report on the banking crisis. The Treasury’s response to this and the Committee’s call for charities to have a separate depositor class will be released at the end of the week.
The Christie charity has recouped the £6.5m it lost in the Icelandic banking collapse thanks to a funding injection from NHS North West, ending its nine-month battle to retrieve its funds. NHS North West today announced that with the start of its new financial year it had identified sufficient funds to bail out the Christie. The charity had filed for a judicial review against the Financial Services Compensation Scheme after it turned down its claim for £6.5m this March. However, Caroline Shaw (pictured), chief executive of the Christie, confirmed it would no longer pursue High Court action in view of the cash offer. The collapse of Kaupthing, Singer and Friedlander has highlighted widespread confusion about what levels of protection are offered to charities under the Financial Services Compensation Scheme.
More charities should adopt e-banking and become less reliant on cheques to mitigate risk, according to Peter Mitchell, chief executive of CAF Bank.
The collapse in the value of the pound on international money markets has cost Christian Aid around £15m, or 25 per cent of the value of its money, according to its director Daleep Mukarji.
Charity Bank deposits grew by almost seven per cent last year, its newly published 2008 accounts have revealed.
UK commercia property is likely to attract foreign investors seeking to benefit from sterling’s weakness, according to Adam Chester, chief economist at the Bank of Scotland Treasury. Chester was speaking at Charity Finance’s Charities Property Conference on the economic outlook, where he predicted that interest rates would not start rising again until well into 2010.
Naomi House Children's Hospice has slammed the news that charities which lost deposits in Iceland may only get half of their money back from Kaupthing, Singer and Friedlander bank (KSF) over the course of three to four years.
Charities should be compensated for Icelandic banking losses and should have their depositor classification reviewed to prevent such problems in future, according to the Treasury Committee’s first report on the banking crisis. The report argues that “on this occasion only” charities should be compensated, as one of the tests a charity must pass to be protected under the Financial Services Compensation Scheme (FSCS) definition of a retail depositor is “inappropriate for those charities using fixed assets in the course of their work.”
More than half of charities have reviewed their banking arrangements in the past year and two in five spread their money between two or more banks, according to Charity Finance’s annual survey of charity banking relationships. Some 52 per cent of the 233 charities that took part in the Charity Finance Banking Survey 2009 said they have reviewed all their banking arrangements in the last 12 months, and 40 per cent took action to mitigate their risk by spreading their deposits.
The Charity Banking Survey 2009 is written by banking journalist Diane Sim, who brings her expert eye to bear on this most interesting of environments for the world’s banks and their attempts to focus on the charity niche in the context of certain other distractions.
The Charity Commission responds to an insomniac chair, wracked with worry about trading while insolvent
Nick Hurd, shadow minister for charities, has called for a short-term Treasury loan fund to help charities which face financial difficulty as a result of lost bank deposits.
The Community Interest Company dividend cap is to be reviewed by the CIC Regulator as part of a wider assessment of the legal form.
Charities that have lost funds in the Icelandic banking crash will not receive any direct financial assistance from the government, third sector minister Kevin Brennan has said. Brennan delivered the bad news to children’s hospice Naomi House, who has formed an action group with Cats Protection to fight on behalf of 25 charities for the return of around £50m collectively.
The National Audit Office does not appear to recognise that the idea of loan finance was a very difficult concept for the sector to get its head around when Futurebuilders was first getting started, Richard Gutch, chief executive of the first Futurebuilders' fund, has said.
