Carolyn Sims, head of banking at Charity Bank, shares useful case studies of charities that have taken out loans to help achieve their missions.
Loans won’t be appropriate for all charities, but they can serve as useful tools for many organisations. The experience of others can be a great source of information when it comes to considering loan finance. So here are some insights from charity directors that have taken on loans and the Charity Bank regional managers that supported them.
TLG, The Education Charity: Growing and developing a sustainable income
Tim Morfin, chief executive of TLG, said: “When we started out, our organisation was a small community centre. We used seven loans over 13 years to provide accommodation, sport and music facilities to young people. Today we have 11 education centres giving young people a second chance for an education, and 39 early intervention centres across the UK, providing extra support to children at school.”
Tip: Rent out space
Roger Ong, credit manager, Charity Bank, said: “When TLG developed its flagship education centre, it designated a part of it to be used as office space. It now lets that space to creative arts organisations, which has contributed to its growth and a £1.9m turnover. TLG is generating close to 60 per cent of its funding independently.”
Unit3Sixty: Raising funds for a new project
Gavin Pardoe, managing director of Unit3Sixty, said: “When Stourbridge’s only skate park closed to make way for regeneration in the area, skaters and BMX-ers had nowhere to go and the nearest facility was 25 miles away. Fast forward to 2015 and Unit3Sixty is a thriving skate park with the whole community backing the venture. Funding came from a number of sources including Sport England and Dudley Council, as well as a number of grants and a loan.”
Tip: Source pro-bono support
Peter Hughes, Charity Bank regional manager, Midlands and East of England, said: “Gavin Pardoe, a fireman, has used his credibility in the community to build contacts and get businesses on board. A national retailer gave them an advertising window for free. Another business provided Unit3Sixty’s kitchen free of charge and the local police force supply bikes and scooters that have been stolen and recovered.”
Settle Hydro: Funding community energy
Ann Harding, co-founding director of Settle Hydro, said: “We started with a question: how can we bring more people into Settle and underpin its fragile rural economy? Today Settle Hydro produces enough electricity to power 50 homes. Not only that, the hydro has attracted many visitors to the town, bolstering business for local B&Bs, pubs and restaurants. We used three loans to achieve our vision and I can proudly say that we are the first community-funded hydro-electric project in Settle.”
Tip: raising community investment
Simon Thorrington, Charity Bank regional director, North of England, said: “The £410,000 up-front cost of the hydro was raised in stages. September saw the first community share issue. By December it had raised £140,000 from 166 investors. This success gave the project access to grants from environmental and regeneration bodies. Through grants and community investors, the hydro was able to raise two thirds of the amount needed, and then accompany those funds with a loan.”
Read more case studies.
Carolyn Sims is head of banking at Charity Bank, which has approved over £200m worth of loans to small and large charities and social enterprises over the last decade.
Call Charity Bank’s loans team on 01732 441919 or visit www.charitybank.org/charity-loans for more information, to discuss the suitability of loan finance for your organisation or to apply for a loan.
With thanks to Charity Bank for their support with this article.
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