Charitable trusts eye community banking

Charitable trusts are considering becoming community banks in an attempt to create jobs and reduce social services' dependence on donations.

The Tindall Foundation and ASB Community Trust have commissioned a report by a former director of Europe's biggest "social bank" Triodos on opportunities for social lending in New Zealand.

Australia's Community Sector Banking, an A$500 million ($640 million) joint venture between the Bendigo Bank and non-profit agencies, has offered its support for a New Zealand initiative.

Tindall Foundation manager Trevor Gray said the country's community trusts, which control $5 billion in capital mainly from the sale of trustee savings banks 20 years ago, would consider the Tindall/ASB report at their annual conference in Napier next month.

Report author Glen Saunders, who now chairs Napier social lender Prometheus Finance, will also lead a workshop on his report in Auckland in April.

ASB Trust chief executive Jennifer Gill said her trust would look at the proposal in the context of its annual budget.

"The whole community-owned enterprise thing is really interesting. If you think of parts of the North Island and parts of South Auckland, if you could support sustainable community enterprises it's got real possibilities," she said.

"It's no accident that it's come back as we are seeing an increase in unemployment."

Mr Saunders told a community economic development conference in Waitakere last week that New Zealand was way behind the rest of the world in developing social investment.

"We looked at the size of the socially responsible investment movement in New Zealand compared with Australia, the UK and the US," he said.

"On a per capita basis, New Zealand was one-tenth of the next lowest country. Australia was next, which was tiny compared to the next one.

"When you are in very big markets like Europe and the US, you are looking at what starts as a small niche in a big market, which in a big market is still quite big. In a small market there is a problem of critical mass."

Christchurch Small Business Enterprise Centre manager Lindsay Jeffs, who is convening a social enterprise network arising out of the conference, said charitable trusts could make their capital go further by investing in loans or share capital for community groups which would earn a return, rather than just making grants that were gone forever.

Similarly, community groups could achieve more if they looked for opportunities for money-making "social enterprise" to make them less dependent on grants.

"We have to shift from a grant culture to an investment culture," he said.

Australian Community Sector Banking executive director Peter Quarmby said 20 Australian non-profit groups formed a joint venture with Bendigo Bank in 2002 to create a bank for the social sector. The bank now offers the full range of banking services to 3400 non-profits and 9000 individual customers.

"We have gone through this growing stage. We have made heaps of mistakes. We know the pitfalls," he told the conference.

"We are more than happy, hand on heart, to give you every bit of assistance that we can."

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