Monday, February 04, 2008

Corporate fundraising: the cautionary tale of the Northern Rock Foundation

Northern Rock gives us a cautionary tale on corporate fundraising for charities. For a decade the Northern Rock Foundation has made an poured millions of pounds into voluntary and community organisations in the north east and Cumbria. But the future of the Foundation and for its beneficiaries is uncertain.

The Financial Times reports that the Foundation ploughed 5 per cent of the Northern Rock’s pre-tax profits each year into charitable works. In 2008, it looked set to receive in excess of £35m from the bank, its largest injection of funds ever.

Believing future funding was assured, the Foundation spent most of its money, rather than tying it up in endowments. Of the £190m it had received, it spent £171m to date. In response to the bank’s difficulties, 2007 foundation spending was trimmed to £23m and 2008’s cut to £7m. Future grants are expected to be much reduced especially for some sector such as culture and heritage.

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