Funding story: Charity Bank North

Charity Bank's new northern branch will make loans and offer general financial support to the voluntary sector.

Last week, Charity Bank launched its new office in Leeds. Until April, Charity Bank North will be piloting work with voluntary and community action groups. It will then formally roll out its programme, which is being backed by £10m from the regional development agency Yorkshire Forward.

Although the bank is in the business of making loans rather than grants, a lot of Charity Bank North's programme focuses on general financial support to the sector, so it should be of huge interest to organisations whose main income comes from grants.

Malcolm Hayday, chief executive of Charity Bank, explains: "There are 4,400 registered charities in Yorkshire and Humber, so you're probably talking about 10,000 community sector organisations. A lot of them might not want to access loan finance, but they need to be able to make independent, informed, strategic decisions about their future."

Charity Bank intends to develop a series of tools to assist with these decisions. This process will start with an online exercise looking at the comparative merits of setting up long-standing organisations and short-term projects.

In addition, the bank hopes to work with about 1,000 organisations in more detail on an "investment readiness programme" that will support them in business planning. Only about 100 of these organisations will probably need loan finance.

A small group of small to medium-sized organisations will also get hands-on support that will include capacity building, mentoring, professional services, an exchange programme with NGOs in central Europe and - thanks to the partnership with Yorkshire Forward - some small grants support.

"We want to enable them to think about what sort of future they want," Hayday says. "Do they actually want to grow? Do they want to develop enterprises? What about those who don't have a hope of developing enterprises or those arts or advocacy organisations that haven't necessarily thought about their own ability to determine their own futures?

"We want those without money to think as strategically as those that have it. In this context, loans are only an instrument for those that want or need to access capital of whatever sort."

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