Scrapping of charity is a big mistake

MARY Craig, chief executive of the Lloyds TSB Foundation, pulls no punches in describing the decision of the Lloyds Banking Group to terminate its 25-year funding of the charity as “an act of determined vandalism”. We agree.

Both in its impact on the voluntary sector across Scotland and in the bank’s standing in the Scottish business community, it is a deeply harmful decision and one taken to the point of self- destruction of its reputation. The Trustee Savings Bank had an ethos of charitable work which bound the bank to the wider community – the sort of relationship that banks today need to recreate.

This special ethos was recognised in an act of parliament and in the enduring relationship between the foundation and the bank – until now. Over this period the foundation has distributed 85 million to Scottish charities.

Its trustees well recognise the financial plight that the bank is in. But that is not the point at issue. The bank not only sought to reduce the foundation’s share of group profits, but also to have funds directed to purposes that the bank saw fit, violating the fiduciary independence of the trustees. Both in the manner that the bank has treated the foundation and in its decision to give notice to end the agreement, with severe consequences for many voluntary organisations, the bank’s actions will leave a bitter taste.

The one crumb of comfort is that the notice period is nine years. Hopefully this gives LBG ample time to reconsider and rebuild this valued relationship.