Northern Rock Foundation

Discussions between Northern Rock Foundation and Virgin Money, on the future relationship between the two organisations, over the past year have now ended. 

The Foundation hoped to agree with Virgin Money a viable long term solution to secure the Foundation’s future. Following wide ranging discussions it is now confirmed that Virgin Money cannot commit funding to ensure this, and will not continue the previous funding agreement between us.  

Ideas for partnership working were also discussed and a limited number were eventually selected by Virgin Money, to be jointly funded, but none of the proposals included any funding for the Foundation itself. Northern Rock Foundation’s mission is, and always has been, to target its funds to areas of work where there is a significant social need and a lack of resources. After careful consideration the Foundation’s trustees felt these ideas either duplicated the work of others or weren’t aimed at priority areas of need, and therefore were not the best use of the Foundation’s funds.   

The Foundation’s closure is now inevitable, as it receives no income from any other source. Trustees will begin to implement a plan for an orderly wind down. The current grant programmes are already due to close at the end of 2014, as previously announced, and Trustees will make further announcements later this year about the use of the Foundation’s remaining funds. 

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.”

ENDS

April 22 2014

For further information please contact

Hilary Florek  07832 552624   0191 285 7100

 Notes to Editors

Northern Rock Foundation is a charity and company limited by guarantee with an independent Board of Trustees that makes all decisions on governance, finance and policy. The Foundation aims to tackle disadvantage and improve quality of life in North East England andCumbria. The Foundation’s work is delivered by a professional staff team of 12 based in Newcastle upon Tyne.

The Foundation was established when Northern Rock Building Society demutualised in 1997.

Up to 2007 Northern Rock covenanted 5% of its pre-tax profits annually to the Foundation. During the three years 2008 to 2010 Northern Rock Foundation received £15 million per year as part of the arrangement under which Northern Rock was taken into temporary public ownership. From January 2011 the Foundation was supported by Northern Rock plc through a funding agreement to provide one per cent of pre-tax profits. As part of the sale of Northern Rock plc to Virgin Money, which completed on 1 January 2012, it was confirmed that Virgin Money would extend the commitment, in respect of the Northern Rock business, until the end of 2013.

Virgin Money donated £500,000 in April 2013

A further donation of £1million, from Virgin Money was announced in March 2014. This money will be used to fund Northern Rock Foundation’s current grant programmes, which were already planned to include this donation.

Northern Rock Foundation expects to spend almost £7 million in 2014, on grant programmes and other projects to support charities and voluntary organisations.   

The Foundation is the largest independent grant maker in the region and is amongst the top 50 trust and foundation grant-makers nationally in terms of grant spend.