Newsmaker: Seeing double

Charity Bank's chief operating officer, Jim Gilbourne, wants to make the business twice as big within five years.

Jim Gilbourne. Photo: Newscast
Jim Gilbourne. Photo: Newscast

Jim Gilbourne is a meticulous strategist. His new post, as chief operations officer at Charity Bank, was itself a success in playing the long game. Since hearing about the bank's inception five years ago, he has planned his entrance.

Gilbourne quietly took the job two months ago. He has an overriding respect for the institution he manages. "I was surprised when Charity Bank came on the scene," he says. "What grabbed me most was the mission it was set up to implement.

"The idea of providing affordable loan finance for the voluntary and community sector fascinated me. I followed the bank early on, and even left a note with HR to say that if anything came along they should let me know."

Now Gilbourne is positioned to oversee the bank's financial, technological and administrative operations on the cusp of a new era: a five-year programme for doubling the bank's size and forming a regional network of third sector lenders in the UK (Third Sector Online, 21 May).

Since Charity Bank does not profit from its loans to charities and social enterprises, it needs to generate £10m of capital from investors to double in size. Gilbourne is undaunted. With 15 years of management experience in building societies, he says he is used to implementing long-term projects.

"This plan is eminently achievable," he says. "There will be challenges for getting the capital in place, but if you have the right products combined with the right promotional activity in the right context, then you can achieve business in the sort of volumes we're looking at. Although a 100 per cent increase seems ambitious, in the context of mainstream banks and building societies we're asking for relatively small amounts."

Growth will bring re-evaluation, and one question is whether the bank will be able to meet the needs of smaller charities that struggle to find independent revenue streams and therfore cannot take out loans.

"Now we are sustainable and have a long-term future, we can start to reassess where we pitch our own lending," Gilbourne says.

But he emphasises that Charity Bank is regulated by the Financial Services Authority and must continue to be a responsible lender. "It's treading that line between being a bank and a charity," he says.

As the bank achieves greater prominence, there are other challenges. "The bigger we get, the more likely it is that mainstream banks might come in and start sniffing around and saying: 'Is there a market here for us?'" Gilbourne warns.

"Philanthropic investment is gaining more and more publicity and momentum, and we want to be riding that wave and be seen as the natural choice."

The bank faces further pressures from within the third sector. The recent proposal to use money in dormant bank accounts to fund a social investment bank to finance charities and social enterprises could be a threat to the bank unless it can ensure sufficient input at the planning stages.

But Gilbourne says: "These are all huge opportunities for the banks to give more prominence to the financing of third sector organisations."

Although he is reluctant to give details, Gilbourne hints at the potential for Charity Bank to enter more strategic partnerships with third sector organisations and government bodies. He suggests that the arrival in August of John Low as new chief executive of the Charities Aid Foundation could herald joint ventures.

"As long as the bank is nimble and keeps its initiative, we can rise to those challenges and make the most of the support we have," Gilbourne says. "This is something we can really get our teeth into."

Golbourne CV

2007 - Chief operating officer, Charity Bank
2003 - Chief executive, Catholic Building Society
1999 - Deputy chief executive, Catholic Building Society
1992 - Deputy chief executive, Clay Cross Building Society
1990 - Branch manager, Derbyshire Building Society

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