Charity Bank secures additional equity investment from Esmée Fairbairn Foundation

Oct 06, 2020

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£230k investment brings Esmée’s shareholding in Charity Bank to £1m. Charity Bank aims to raise at least £3m in new share capital by the end of 2021.

Charity Bank, the loans and savings bank owned by and committed to serving the social sector, has secured a £230k equity investment from Esmée Fairbairn Foundation, as part of its current drive to raise new share capital.

Having raised nearly £5m in subordinated debt in 2019, Charity Bank is now focused on raising new common equity investment from charities, trusts and foundations. Today’s announcement marks the latest in a series of investments that Esmée Fairbairn Foundation has made in support of the bank’s regulatory capital position over many years since the bank’s formation in 2002.

Having slowed significantly at the outset of the current COVID-19 pandemic, approvals of new loans at Charity Bank are now experiencing a resurgence and were ahead of plan through August. Equity investment underpins Charity Bank’s lending activity and ensures that the bank can continue supporting organisations whose services are needed now more than ever. For every £1m of capital invested, Charity Bank can make around £8m of new loans to charities and social enterprises.

Ed Siegel, Chief Executive, Charity Bank, said: “The events of this year have been devastating for individuals, communities and businesses around the world, with charity and social enterprise hit particularly hard. The consequences of lockdown and the current uncertainty will be felt for years to come and charities and social enterprises will have a critical role in supporting society’s recovery from this crisis. As such, it is important that these organisations continue to have access to the funding they require to sustain and grow their activities.

“Last year we lent £50m to such organisations, representing a fifth consecutive year of increased lending. We’re determined to continue supporting the sector and with the backing of mission-aligned shareholders like Esmée Fairbairn Foundation, which was one of our founding investors, this will be possible. With the new investment we are announcing today, and further increases in our equity capital that we are aiming to secure this year and next, we will be able to help more social sector organisations through these challenging times and into the recovery.”

Caroline Mason CBE, CEO of Esmée Fairbairn Foundation said: “Charity Bank is a pioneer and pillar of the social investment landscape, lending to organisations across the UK and all impact areas. Its mission is completely aligned with ours. We were an early investor into Charity Bank, and we are thrilled to continue our support with our second capital investment of the year. Charity Bank has proven that lending to charities and social enterprises not only benefits society but can also be done within an effective business model. We hope models like this become the norm for the future of finance. The events of this year have been devastating for the social sector and the investment will go directly towards rehabilitating it and the communities who most need it. It was a natural fit for us, and we wish Charity Bank every success.”

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 £300m 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.

About Esmée Fairbairn Foundation

Esmée Fairbairn Foundation aims to improve our natural world, secure a fairer future and strengthen the bonds in communities in the UK. We unlock change by contributing everything we can alongside people and organisations with brilliant ideas who share our goals.

The Foundation is one of the largest independent grant-makers in the UK. In 2019 we made grants of £36 million towards a wide range of work within the arts, children and young people, the environment and social change. We also have a £45 million allocation to social investments for organisations with the aim of creating social impact.