The Lloyds Bank Foundation for England and Wales is changing its funding strategy to provide larger grants over longer periods of time.
The charitable foundation, which is funded from the profits of Lloyds Bank, donates an average of £11,500 per charity each year over two years, amounting to a total of £25m a year.
The new approach will involve the average donation rising to about £25,000 per charity each year, over as many as six years. The main thrust of its investment will be towards young, vulnerable people facing difficult times in their lives, such as homelessness.
The foundation will wind down its current process and, from February, will not accept new applications for existing programmes.
By April the foundation will offer two funding pots. The main programme, called Invest, will offer longer-term funding of up to £25,000 per year for up to six years.
The other, called Enable, will meet short-term development needs with the support of £15,000 per charity spread over a maximum of two years.
A further programme of non-financial support, called Enhance, will give existing beneficiaries advice and support from the bank or organisations with which it is in partnership. It will help organisations in areas such as improving their financial systems or preparing for mergers.
Paul Streets, chief executive of the Lloyds Bank Foundation, said the changes to the foundation’s strategy came after a review that asked how it could support charities more effectively.
"We want to think about building a longer-term relationship for them in what’s an unsustainable funding environment," he said. "Charitable foundations have been the marzipan on the fruitcake of government funding. We have to think about what we are going to do to replace the fruitcake."
The Lloyds Banking Group announced last month that its three grant-making foundations, covering England and Wales, Northern Ireland and the Channel Islands, would receive a proportion of up to 0.5 per cent of the banking group’s profits, or £15m, whichever is higher. The total funding will be split between the foundations according to the size of the country to which they belong.
The foundation for England and Wales received £25m last year.