There is an old Gaelic Proverb which says that “in order to know where you are going it is sometimes necessary to know where you have come from”.
Lloyds TSB Foundation for Scotland owes it existence to The Rev'd Henry Duncan, who founded the Trustee Savings Bank in Ruthwell, Dumfriesshire in 1810. He started the Bank so that everyone, regardless of wealth or position, could benefit from a savings bank.
In 1985, the Trustee Savings Bank Group chose to set up four independent charitable trusts (Scotland, England & Wales, Northern Ireland, Channel Islands) to distribute 1% of pre-tax profits according to the spirit and principles of Henry Duncan. The Foundation for Scotland receives almost 20% of this amount.
In 1995, the merger between TSB Group and Lloyds Bank significantly increased the Foundation’s income. To date, Lloyds TSB Foundation for Scotland has received over £82 million from Lloyds Banking Group plc, and this money has improved the lives of hundreds of thousands of people across Scotland and, more recently, overseas through Scottish Charities working abroad.
2009 was a very difficult year for the Foundation. The losses made by Lloyds Banking Group meant that the Foundation would receive virtually no money in 2010. In return for short term funding Lloyds Banking Group wanted to reduce the Foundation’s share of pre-tax profits by half. The Banking Group also wanted the Foundation to align a significant portion of its funds to the Group’s business priorities, and to be able to appoint senior Bank staff as Trustees. The Foundation’s Board refused to accept this proposal as it was not in the best interests of the Foundation or the charities it supports. So, in October 2009 the Foundation took the difficult decision to suspend its grantmaking.
Despite the Foundation offering the Banking Group an alternative way forward that would be cost neutral to both the Banking Group and the taxpayer, Lloyds Banking Group chose to serve notice on the Foundation’s historic covenant. The Foundation is now in a nine year notice period, after which the 15.7m limited voting shares it owns will become ordinary shares, providing the Foundation with a long term income to enable it to continue its grantmaking work.
Money raised from selling shares bought in Lloyds Banking Group’s capitalisation and rights issues in 2009, from which the Group wrongly tried to exclude the Foundation, has provided the funds to enable the Foundation to re-start its grantmaking.
2010 is the 200th anniversary of the very first Trustee Savings Bank set up by The Rev'd Henry Duncan, and the Foundation has re-named its main grant programme in his honour.
