An innovative and proven way to make charity cash work harder

Anyone with even a basic knowledge of personal banking knows that a current account is just about the worst place to earn a decent return on hard-earned cash. Current accounts aren’t designed to reward, but are necessary mechanisms that provide access to funds, certainty and control.

That’s not to say these characteristics aren’t important. Charities who hold cash in current accounts do so because they need liquidity and cannot tie up funds in investments with lock-in clauses and penalties for early withdrawal.

However, that doesn’t mean that a current account is the only choice for charities who are looking for access, certainty and control. At Citizen Heart our experience in the sector convinced us that charities are being massively under-served by current accounts and traditional cash-management models.

Incremental Income and Capital protection

With pitiful interest rates as standard, there is currently about £17 billion in cash languishing in the current accounts of UK charities, earning next to nothing. That’s a massive waste of cash that could be 1) earning incremental income for charities and 2) benefiting from a capital protection.

It is upon these two pillars that the Buffer Model® was born. Put simply, this alternative cash-management model for UK charities is a proven way to generate incremental income from available cash. Rather than tying up cash in listless current accounts, UK charities now have the option to earn better returns without sacrificing access, certainty or control.


How does it work?

Charities with over £500k in available cash can earn annual returns of up to 2.5% when they invest cash via the Buffer Model®, with a unique capital protection provided by the Social Impact investor, Tavira Securities.

Tavira Securities adds a further 10% of their own funds to the Charity cash to guarantee the 2.5% return.

With no lock ins and no penalties for redemptions the cash investment is readily available, ensuring easy access.

With proven and robust risk management, quick access and visibility the Buffer Model® offers a competitive alternative to the bank accounts that are delivering next to nothing for the hard won cash from charity donors.

The Chief Executive of Tavira Group, Eliot Goodfellow, explains the motivation behind their social impact investment strategy:

“In a low interest rate environment, if charities don’t seek an alternative to current accounts held with high street banks, they risk disservice to their donors and even more importantly, recipients of the funding.”  

Our case study

Charities Trust is a leading donations management organisation committed to growing charitable giving by working with innovative financial service providers to deliver stand-out returns for good causes. As the Buffer Model® case study, Charities Trust enjoyed consistent returns, robust risk-management and the transparent reporting that are inherent to the Buffer Model®.

This is what its CEO has to say about the Buffer Model®:

“The Buffer Model® provides the assurances charities need about their investments. This approach is innovative and groundbreaking and provides real, tangible returns.”

Linda Minnis

Chief Executive, Charities Trust

Is it open to all?

The Buffer Model® is designed specifically for UK charities with over £500k in available cash.

Is it for us?

If you are a charity looking to benefit from an innovative alternative cash-management model, enjoy increased returns without ceding control of your cash then the Buffer Model® could indeed be for you. Of course, every charity considering an investment strategy needs to carefully consider its options.

Quite simply, we’re here to introduce a proven alternative to watching your cash stagnating in a traditional current account. Why not get in touch?