Member Article

Northern Rock Foundation to be wound up as Virgin Money funding talks fail

The Northern Rock Foundation is to close after negotiations with funders Virgin Money failed to establish long term funding for the charity.

The independent charity, which was born out of the Northern Rock Building Society’s demutualisation in 1997, says closure is now inevitable.

Funding for the charity’s grant programmes came from 1% of Northern Rock pre-tax profits until the bank’s sale to Virgin Money in 2012 - when the commitment was extended by Virgin up to the end of 2013.

Despite being loss making in 2012, £500k was donated to the Foundation and a further £1 million was pledged in 2014 on the back of the Bank’s 2013 results.

Following a year of discussions no long-term deal was agreed, and Virgin Money will cease funding.

The charity, which employs 12 people in Newcastle will now go through a period of winding down as the Foundation’s current grant programmes are due to close at the end of the year.

Announcements on the Foundation’s remaining funds are expected later in the year.

Alastair Balls, chairman of the Foundation said “It is very disappointing after such extensive discussions to have to accept that Virgin Money will not commit to fund the Foundation in future.

“Trustees are keen to ensure that our remaining funds are used to achieve significant benefit in the North East and Cumbria and we will announce our plans later this year.”

Discussions between the two parties had led to series of partnership ideas being mooted, but the Foundation said it felt the ideas duplicated the work of others, or were not aimed at priority needs.

A series of joint-funded projects, some potentially worth £1 million in funding from Virgin Money, had been proposed.

Virgin Money maintain their commitment to the North East, highlighting schemes such as ‘Make £5 Grow’, the national Virgin Start Up Loans programme which is active across the region and its work with the Community Foundation.

Jo Barnett, head of Social Enterprise at Virgin Money said: “The Northern Rock Foundation has contributed to some fantastic work here in the North East and Cumbrian regions for many years and we have been proud to support them with £1.5 million of donations over the last two years.

“We have tried hard to find a way to continue working together on programmes that would deliver significant benefit to the region, however we have not been able to agree a way forward.

“We are very proud of Virgin Money’s broad community programme, both on a regional and national basis, including Virgin Money Giving, our not for profit fundraising website, which has now helped fundraisers raise over £250 million for charity since its launch. We will continue to support the North East community strongly in a variety of ways and look forward to establishing new partnerships to deliver a range of exciting new projects.”

This was posted in Bdaily's Members' News section by Tom Keighley .