The Charity Bank

overall rating:

1.9

planets

Jacqueline Woo
8/2/2022
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The Charity Bank (abbreviated in this review as “CB”) is a savings and loans bank established in 2002 as an ethical institution with the mission of supporting social enterprises and charities. Since its founding, it has provided over 1,100 loans worth upwards of £400 million for causes such as housing, education, mental health, and community. 

Its attitude towards contributing to the greater good is commendable. However, it is more broadly focused on a wide range of social causes and not environmentalism specifically. In other words, while CB does amazing work to help others, it does not do enough to help the planet from a strictly ecological perspective. Still, it does not engage in environmentally detrimental practices, which shows that CB does hold itself to an upstanding moral standard. 

This is a great bank to choose if you value putting your money towards ethical causes, as CB lives up to its motto of being “A bank for good.” Unfortunately, if you are looking specifically for a bank that is committed to being green, this may not be the bank for you. 

What it's made of:

1

CB provides loans for enterprises in England, Northern Ireland, Scotland, and Wales to use for social causes. A Social Impact Report from 2020 reveals the total amounts that CB has lent over the past few years. It includes a graphic depicting the breakdown of the types of causes the loans went towards from 2015 to 2019. “Housing & local facilities” and “Arts, heritage, sports & faith” consistently ranked as the top causes that CB supported in these years. While this is laudable, CB has invested much less in “Conservation of the natural environment,” which went from being the fourth most funded cause in 2015 to the least funded cause in 2019, receiving a mere £590 thousand out of the total £49.9 million in loans that the bank gave out that year. It was once again the least funded cause in 2020, receiving only £620 thousand out of the total £44.3 million in loans that CB provided that year, as shown in the more recent Social Impact Report from 2021. Not to mention, the report did not even display Conservation in the loans allocation breakdown for 2021, which indicates that CB invested an insignificant amount into that cause. Based on these numbers, the conclusion arises that CB does not prioritize investing in environmental sustainability as a humanitarian issue. 

It is also noteworthy that the numbers from the 2020 report are slightly different from those in the 2021 report. The overarching sums of loans given each year are stated identically in the two reports, but the stated amounts allocated for each cause do not match. This stood out as an odd inconsistency that perhaps points to corporate oversight or a lack of transparency. 

Despite its lack of involvement in funding conservation efforts, a review in 2018 from a website called Ethical Consumer found that CB did not lend to the fossil fuel industry. So, while CB is not at the forefront of helping the environment, at least it is not actively contributing to harming it.

How it's made:

2.5

The structure of CB consists of savers, borrowers, staff, and shareholders that are committed to social causes. Notably, all of its shareholders are charitable trusts, foundations, or social purpose entities, leaving no room for compromise in its ethical mission. CB also uses money that savers put into their savings accounts to fund loans. CB pays back its savers with interest, which incentivizes them to put their money into CB and, by extension, the humanitarian causes it supports. 

Likewise, CB offers two Green Loans as incentive for borrowers to become involved in sustainable building projects. One of these Green Loan offers is the Sustainable Building Loan, which gives borrowers £1000 or £2000 cashback if the property they use a CB loan to purchase or construct earns an Energy Performance Certificates (EPC) rating of B or A, respectively. The other offer is the Energy Improvements Loan, which gives borrowers a refund on their loan arrangement fee when they use a CB loan to make energy efficiency improvements to their properties. 

Additionally, CB has published many stories on how its borrowers have used its loans for social and ethical endeavors. One story is from the Totnes Renewable Energy Society (TRESOC), which develops renewable energy resources in Totnes, a town in Devon, England. TRESOC used a CB loan to install a solar energy source for a local dairy farm, adding to its solar energy portfolio and allowing it to earn enough income to cover its operating costs and its first interest payments to its members. This in turn helped the society establish a strong foundation for its sustainably-minded community to grow and do more eco-friendly work. This is an example of how CB’s loans can be utilized for projects that benefit the environment. As mentioned in the previous section, it would be even better if CB funded more of these types of projects to increase its impact on combating the climate crisis.

Who makes it:

2.25

Much of the staff within the lending and savings teams at CB come from backgrounds in finance and banking. An impressive portion of the CB management and board, though, have backgrounds and experience in social and charitable work. To highlight, CEO Edward Siegel previously served as a Managing Director at the social impact investment fund manager Big Issue Invest and as a board member of multiple charities and social causes in the United Kingdom. Similarly, other members of CB are also heavily involved in charities and social work (the complete staff roster can be found at the last link listed in the Sources section), which speaks to how dedicated the CB leadership overall is to philanthropy. There is a lack of expertise in sustainability among the CB staff, but the heavy involvements in social work across the board are definitely worth noting.