/ Money

In praise of banks (for once)

Donation box

Banks probably feel like they get a bum rap from consumer groups and the media. Most of the time they deserve it. So when banks do charitable work in the community, is it a cynical marketing ploy or genuine help?

Here are three very different examples of how banks seek to help consumers:

1. Barclaycard is currently offering £1,000 educational grants to lone parents through its Horizons Education programme. Since 2005, the company has donated £7 million to the programme, with 450,000 parents and children helped.

2. Santander has funded a study into expanding the credit union network, and is providing a £100,000 investment into a new assessment system for credit unions.

3. Last year, MBNA launched its ‘Tackling Numbers’ project, aiming to teach basic mathematics skills to thousands of schoolchildren in England, using rugby to promote the understanding and learning of numeracy among seven to nine year olds.

Of course, the amounts donated will often buy the company positive publicity many times more valuable than the actual cash cost.

Banks doing good

But let’s not look at the motivation, but concentrate instead on the benefits. For anyone receiving money from the £7m Barclays fund, for example, this grant could be life-changing.

And there are all the donations we maybe don’t hear about. For example, banks also fund the vital work of free-to-consumer debt organisations, such as the Consumer Credit Counselling Service and Payplan.

Then there’s MyBnk, a social enterprise working to build young people’s knowledge, skills and confidence in managing their money. Look at the funders of the scheme and you’ll spot a whole host of financial providers, including Britannia, Deutsche Bank, Coutts, Charity Bank and JP Morgan Chase.

More than just a bank

For some banks, it’s part of a much wider ethos. The Co-operative Bank, for example, claims it is ‘Good with money’. It’s a clever slogan and reflects the Co-op’s overarching ethical stance. For example, during 2009 the Co-operative invested £11.3m in the community, equivalent to some 4% of its pre-tax profits.

And don’t forget Charity Bank, the only regulated bank in the UK that is also a registered charity. It uses your deposits to finance charities and other social enterprises. Social lending is at the heart of everything it does.

I’m going to take off my cynical hat for once and offer an unequivocal pat on the back for the charitable work banks do.

Do you agree? Should banks give money away to charity and social causes? Or should the money be ploughed back into offering better savings rates, lower borrowing rates, or a higher return for shareholders? And in the spirit of positivity, please do add your own examples of companies doing good for their communities.


I’m afraid my cynical hat is stitched into my thick skull!

For me it’s simply PR, that’s all. The only thing that banks are interested in is the bottom line, absolutely zero else. Customer service or marketing representatives may appear to “care”, but they are trained to.

So much respect for trying to see the good in them, unfortunately, I cannot 🙂

Rose says:
15 July 2011

I agree with the previous post, I’m afraid.
Banks need to be more “charitable” in their daily actions to customers. It’s the banks’ actions – particularly their credit card practices (eg increasing interest rates for customers who have had perfect payment records for years, reducing limits without notice then charging huge fees, etc) – that have put so many people into debt! So they’re definitely the ones who should be funding the CCCS etc.
Helping lone parents – fine, but what about the rest of us who aren’t lone parents who could do with a bit of help from the banks, especially when they’ve had hundreds of thousands of pounds of our money (from salaries, house sale profits, redundancy payments, bonuses, etc) in their coffers for many years. They “gush” with offers when we’re in credit, but penalise us and make surviving financially very difficult when we go through rough times in our lives, through no fault of our own.
MBNA and rugby – seems a very sexist approach to me! So MBNA are targeting young males rather than male and female children equally? Why is that, I wonder??
Santander – supporting the Credit Unions sounds good on the face of it but Santander have had huge numbers of complaints against them and, having seen what they did on one of my credit cards and the problems it’s caused me, they’re probably driving people to need the support of Credit Unions and Santander probably won’t give their customers the money themselves.
I think Natwest have been doing projects where staff members go into schools and give financial information to pupils. This again seems good on the face of it but no doubt it’s just a marketing ploy to get the pupils to sign up to Natwest for their first bank accounts as that will be the bank they’re most familiar with. It also gives pupils a very biased view of the financial world.
Having worked at senior level in 2 major banks, I know that banks don’t do anything charitable without an underlying motive. There has to be something in it for them! Having said that, though, I think they should be forced to do more, for the reasons I’ve said above (ie they’re the ones pushing most people into debt situations).

There is one Bank that balances charitable objectives and looking after all their customers
…. we are called Charity Bank!

We are a registered charity, as well as being an FSA regulated bank. Our mission is not to maximise profit, but to maximise impact on society. Charity Bank only lends our depositors money to charities and social enterprises that are improving lives and UK communities.

Our charitable status means we don’t need to compromise on our social goals for shareholder profit (all surpluses are reinvested for charitable purpose)!

We also belive in pay good rates to our customers…. an investment in our cash ISA won’t just secure you a competitive 2.5%pa return on your money. It will also help us lend money to any number of charities and social enterprises.


Ron says:
15 July 2011

All of the commercial banks’ charitable work comes out of either the PR or the marketing budgets.

You can therefore be absolutely certain what is motivating them … banks charitable activities are puffery with a veneer of doing good.

All it amounts to is a tax on their customers.

Yes Charity Bank! Big fans.

Cynicism is abound when talking about banks and any CSR work that involves young people. Parents and importantly teachers are acutely concerned at what could be conceived as ‘brand pushing’.

Many resources provided and delivered directly by High Street banks are designed in keeping with their marketing materials.

Parents usually open their child’s first account but with independent financial education they can make that first important financial decision themselves – taking responsibility for your money early on could help prevent poor financial decisions later.

Ultimately, when it comes to banks and ‘doing good things’, we’d all be much happier if cultures and practices in banking changed – think Handelsbanken and their “church tower principle”.

jude says:
19 July 2011

I switched most of my cash ISA from Smile which was (and still is) paying 0.5%; to Charity Bank which was paying six times as much! The only reason I didn’t switch it all was that there’s a notice period with the Charity Bank. I think the interest has gone to 2.5% but it’s victimless interest.

When I questioned Smile about their poor interest rate, I was told that it was because of their ethical policy…. but that really doesn’t stack up as their partner bank Britannia, offers 3%.