THE BIGGEST LOSERS from the Northern Rock train-wreck probably won't be the bank's savers. Their cash is protected by the government. But the charities supported by the bank - through the Northern Rock Foundation - have no such guarantees. Although the Foundation will probably be able to honour the commitments it has already made, its longer-term future is uncertain.

This is seriously worrying. Northern Rock has been one of the most charitable companies on the stock market for some time. It gives an astonishing five per cent of its profits to good causes. And if it fails to give enough, or if the bank is bought, the charitable Foundation is entitled to a 15 per cent stake of Northern Rock's shares in return.

This seems like a good deal. But with Northern Rock's share price in free-fall, it's become obvious that a five per cent cut of this year's profits won't amount to very much. And even a 15 per cent stake in the bank doesn't look like a particularly good deal in any more - such a lump sum would now only be worth a third of the £600m it was valued at a few months ago. So if the bank is sold - and fails to give the required five per cent - the Foundation might be in serious trouble.

In 2006, the Northern Rock Foundation gave away almost £29m (PDF) in grants to charities, mostly in the north of England. It's impossible to say how much it will have to spend next year. But one thing is certain: it will be a lot less than anyone hoped.

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