Mortgage lender to share earnings with charities

A financial services firm in north-east England is starting a scheme that will allow charities to benefit from personal mortgage arrangements.

In return for advertising the services of Avenue Financial Services to staff and donors, charities will receive 30 per cent of the Tyne & Wear firm's commission from arranging subsequent mortgages. This will be equivalent to roughly £150 per case.

Avenue says this could provide charities with a regular source of income. The firm has calculated that 90 per cent of charity donors are likely to have mortgages. On average, people remortgage every two years, Avenue claims.

"I think there's too much money around in financial services," said Andrew Simpson, director of Avenue. "It would be better if this extra cash went to a good cause rather than being used for client entertainment.

"Corporate marketing is not nearly as beneficial as allowing people to give to something they believe in."

The firm is currently seeking small and medium-sized charities to partner with. In the meantime, it will trial the project with a local charity football team.

The Financial Services Authority said the plan fell within its guidelines, so long as the advertising used by charities was "fair, clear and not misleading".

A Charity Commission spokesman said: "It's open to charities to enter into commercial partnerships with companies, provided the trustees are satisfied that this would be in the interests of the charities and they have complied with the relevant legal requirements."

These requirements are available on the commission <a href="http://www.charitycommission.gov.uk/supportingcharities/com_fin2.asp">website</a>.

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