Lobby for a new role for The National Fund

After World War One, national debt was 140% of gross domestic product, compared with 60% today. By 1927, the debt had risen to 160%. This prompted one anonymous donor to give £500,000, about £20m in today’s terms, to set up the National Fund: a charity whose sole aim was to gather enough funds to pay off the nation’s debt.

In 2011, the National Fund has £319m. This had led to calls to explore new ways of how the National Fund could best be used. The problem, however, is that the National Fund can only be accessed once it has acquired sufficient funds to pay off the national debt. With the UK’s national debt now standing at £984bn, the National Fund would need at least another 600 years to accumulate enough funds to pay off the debt.

Stephen Lloyd, head of charities at Bates Wells and Braithwaite, says that as the National Fund is unlikely to ever be in a position to pay of the national debt that its monies should be given to social lenders to invest in the third sector.

Since 2009, the National Fund has been managed by Barclays Fiduciary Services, and they have made a request to the Charity Commission to allow the Fund to give grants. However, neither Barclays nor the Commission are yet able to say when this may happen. To help speed up the process, Lloyd advises that the sector should lobby to make the change happen.

(David Ainsworth, “The ‘patriotic’ charity turns its thoughts to giving grants”. Third Sector, 8 Nov 2011).