Northern Rock, previously one of the leading mortgage providers in the UK, took a higher international profile recently after being the first big bank to be caught in the credit crunch. This triggered a run on the bank and massive government intervention to keep the bank in business. Besides being caught up in those banking problems, The Guardian is now reporting that the bank promoted a charity fund, though the charity in question was unaware of the relationship.
And at the heart of Granite's operations is a rather peculiar fact: on paper, at least, it had been set up to benefit charities, and in particular a small organisation for children with Down's Syndrome, and their families, which was being run from a semi-detached house on the outskirts of Newcastle.The "charity trust" set up by the bank raised £71 billion (double that and add some for dollars) though it remains to be seen if any charities were aware of this.
Even more peculiar, perhaps, is the fact that nobody at Northern Rock bothered to tell the children's charity that it was a beneficiary, and the charity never received a penny from Granite.
For seven years, Down's Syndrome North East (DSNE) raised small sums of money as best it could. There was £125 from a man who cycled across the United States, children at a primary school in Middlesbrough chipped in £100, and the North East Ladies' Luncheon raised £750. And the whole time, the volunteers who kept the charity running were unaware that it was supposed to be the beneficiary of a trust which had raised £71bn on the international financial markets and which enjoyed a turnover of £1.8bn last year.
After the Guardian asked Northern Rock for an explanation, the bank apologised to DSNE for what it described as an "oversight" and promised the charity that it would receive a donation in the future. The bank then told the Guardian that the charity might receive a payment - but only if its trust was wound up.
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