£4m Investment Boost to Fuel Growth in New Lending

Posted in

Charity Bank, the loans and savings bank for positive social change, today announced £4m in new equity investments from six new investors as well as an approved investment from its existing shareholder, Big Society Capital.

By leveraging these investments with deposits, the bank will be able to make more than £32m in new loans to UK charities and social enterprises at a time when the social sector is in acute need of sustainable financing solutions.

The Garfield Weston Foundation (£1m investment), The Clothworker’s Foundation (£1m), Bank Workers Charity (£250k), Places for People (£250k)[1], Drapers’ Company (£250k)[1] and Alternative Bank Switzerland (£250k) become new Shareholders in Charity Bank, while Big Society Capital has approved an additional £1m. These follow investments from Barrow Cadbury Trust (£500k) and The Samworth Foundation (£500k) in March 2021, and Esmée Fairbairn Foundation (£230k) in late 2020.

These investments evidence the growing appetite amongst trusts, foundations and other impact first organisations to make social investments as an alternative to grant-making to meet their social impact objectives.

The Bank Workers Charity is the first occupational benevolent fund to become a Shareholder in Charity Bank and shares a distinct connection with Charity Bank by being the occupational benevolent fund specifically for the banking sector. Places for People are the first Housing Association to invest in Charity Bank while Alternative Bank Switzerland (ABS) becomes Charity Bank’s first shareholder from outside the UK in an expression of solidarity for values-based banking. Both ABS and Charity Bank are members of the Global Alliance of Banking on Values, an international network of independent banks using finance to deliver sustainable economic, social and environmental development.

Ed Siegel, Chief Executive, Charity Bank, said: “Having such a diverse group of impact investors joining as shareholders in Charity Bank is a positive reflection of our success in reaching impact-driven organisations in the UK with specialist financing and support. With this additional investment, we will be able to expand and broaden our support, helping more charities and social enterprises access the funding they need to sustain and grow their services.”

“UK charities and social enterprises are responding to an array of urgent social issues, but following an extended period of public budget austerity, many have struggled to secure sufficient funding. The effects of the Coronavirus pandemic have only made this situation worse. In the midst of the COVID-19 crisis, when many lenders moved to the sidelines, Charity Bank approved a record level of new loans. The new equity investments we have secured will enable us to continue to grow our lending and to offer the bespoke financing solutions that will be needed by many organisations as they rebound from the effects of the pandemic.”

Philippa Charles, Director of the Garfield Weston Foundation, said: “Our commitment complements the Foundation’s aim to support organisations that have effective solutions to helping those most in need. For almost twenty years, Charity Bank has played a crucial role in ensuring charities and social enterprises can access the finance they need to tackle some of the toughest problems in the UK. Our commitment is informed by Charity Bank’s unique focus on lending for impact, and the clear social mission that runs through all of its activities. We are delighted that our commitment has also encouraged others to be involved. The way that Charity Bank is able to leverage equity investments means that the number of organisations supported, and the social impact created as a result, will be multiplied many times over.”

Michael Jarvis, Trustee of The Clothworkers’ Foundation and Chair of its Social Investment Sub-Committee said: “Charity Bank’s social impact multiplier effect was a key motivation behind our investment. We are thrilled to join Charity Bank’s inspiring group of shareholders and are excited that this further investment of ours into the social sector will be multiplied to benefit many charities and social enterprises.”

Michael Field, Chair of the Finance & Investment Committee, The Bank Workers Charity, said: “We see social investment as complementary to the range of services that we provide to our clients, and a highly effective way of expanding our reach and maximising the impact of our resources. We were very keen to support the important work that Charity Bank does across the social sector. The impact of the Coronavirus pandemic has been devastating, and we are proud to see our investment go directly towards assisting the communities and people who are most in need.”

Marcus Hulme, Director of Places Impact, Places for People, said: “Our group vision is to create places that work for everyone so working with Charity Bank, who share similar values to our own, gives us the opportunity to enable more charities and social enterprises to access additional capital to make a difference to communities across the UK”.

Richard Winstanley, Clerk, The Drapers’ Company, said: “We are delighted to be working with Charity Bank in their next phase of growth and look forward to fulfilling the Drapers’ Company’s philanthropic mission in a new and effective manner. Charity Bank’s offering to the Third Sector is particularly needed in the current economic climate and we believe that their innovative, can-do approach will unlock other avenues of funding which will aid those most in need of help”

Tanja Reuter, member of the management board, Alternative Bank Switzerland, said: "Promoting an impact for society is the main focus of ABS. Our investment in Charity Bank has a strong effect and leverages the investment significantly for people in need. We hope being a pioneer as the first foreign investor will encourage others to follow."

Stephen Muers, CEO, Big Society Capital, said: “We’re pleased to approve the £1m matched funding as part of Charity Bank’s equity raise, unlocked by more than £3m from other investors alongside us. This additional capital will enable Charity Bank to continue to grow their lending to charities and social enterprises creating impact throughout the UK, supporting them to play a crucial role in the post-Covid recovery.”

[1] Subject to final due diligence

About Charity Bank

Charity Bank is the loans and savings bank for charities, social enterprises and people who want to make the world a better place. It uses its savers’ money to provide much needed loans to UK organisations working to drive positive social change – bringing benefits for people, communities and the environment.

Since 2002, Charity Bank has made more than 1000 loans totalling over £350m to housing, education, social care, community and other social purpose organisations. Charity Bank is owned by social purpose organisations and aims to use its expertise, commitment and flexible approach to lending, to help charities and social enterprises get the support and funding they need.


Important information

Registered Office: The Charity Bank Limited, Fosse House, 182 High Street, Tonbridge, Kent TN9 1BE. Company registered in England and Wales No. 4330018. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register No. 207701. The services/products referred to in this document are intended for use by United Kingdom (UK) residents only. Nothing in this press release constitutes an invitation to engage in investment activity nor is it advice or a recommendation and professional advice should be taken before any course of action is pursued.