Who Funds Non Profit Debt Help Organisations?
This is an interesting area for me, as I’ve been doing some looking into the various charities that help people with their debts. There are some very big and obvious ones, such as Citizens Advice Bureau and Consumer Credit Councelling Service who offer services on a national level, either through local branches or via a centralised call centre respectively.
But how are they funded? And what are the alternatives?
The Citizens Advice Bureau (CAB) are a charity, which was setup at the outbreak of WW2, and continues to this day on donations from the public and various corporate donors.
It may come as a surprise to some people that there are a large number of financial institutions that donate to the CAB, here is a list which I found on their website here:
- Abbey Charitable Trust
- Alliance and Leicester
- Bank of America
- Barclays plc
- Barclaycard
- Department of Trade and Industry
- Experian
- Friends Provident Foundation
- GMAC RFC Foundation
- HSBC
- HM Treasury
- Lloyds TSB Foundation for England and Wales
- MBNA
- Money Advice Trust
- Nationwide Building Society
- Provident Financial plc
- Prudential
- The Royal Bank of Scotland
There are other corporate donors, from solicitors firms to name one sector that stands out, but the proportion is far smaller than that of the banking and finance industry.
When you look at the Consumer Credit Councelling Service website you see that they are entirely funded by the credit industry which according to their website means:
“It is this totally unique mechanism that allows CCCS to provide its services totally free to consumers.”
I would perhaps argue that it also means that the credit industry has a huge strangle hold on debt advice and debt management in the UK as they sponsor the two biggest debt help charities in the UK and no doubt have input on how these two charities deal with consumers’ debt problems.
I know from my own experience that when I spoke with the CCCS they were very helpful, but ultimately at the time they refused to set me up on a debt management plan because I couldn’t meet their minimum criteria for a monthly payment – 1% of the balance of my debts each month.
It would seem to me that the lenders being so closely involved with the debt help charities is a “slight” conflict of interest in that there may be certain consumers that are not getting help when they need it most because they don’t fit the criteria by which the charities work. Whereas commerical debt management companies are able to get debt management plans agreed based on what is affordable to the consumer, regardless of whether it is agreeable to the creditors.
It seems like in most areas of life, if you want good, impartial advice you have to pay for it, which is a shame, because when people are needing debt advice, the last thing they need is a bill for a few hundred quid to setup a debt management plan.
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