Charities Aid Foundation calls for full protection on banked
charity money
20 August 2008
The Charities Aid Foundation (CAF) has written to the
Chancellor, Rt Hon Alistair Darling MP, and the Financial Services
Authority (FSA) requesting full protection for banked charity funds
in the event that a bank fails.
The letter asks for the proposal of full compensation for
deposits of charity money to be included in the FSA consultation on
changes to the FSCS compensation limits that will take place in the
autumn.
John Low,
Chief Executive of the Charities Aid Foundation, said: “We welcome
the consultation and proposals for quick and efficient compensation
payments in the event of bank failure, but would like to see full
protection for charitable funds on deposit. At the moment most
charities are classed as small businesses and therefore subject to
the same restrictions, which seems inappropriate considering the
nature of their work.
“Many charitable organisations retain significant funds to
ensure their objectives can be met when required. To limit the
amount of compensation available to £35,000, or even the proposed
higher sum of £50,000, is inadequate. Many charities would simply
have to close if they were left with such limited funds. The impact
of this on the people and causes dependent upon them could be
catastrophic.”
Notes for editors
The Charities Aid Foundation operates CAF Bank which offers
current and deposit accounts solely for charitable
organisations.
Media contact
James Ketchell
T: 020 7832 3014
E: jketchell@cafonline.org