a different bank for people who want a different world social investment more than the sum...
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A different bank for people who want a different world
SOCIAL INVESTMENT More Than The Sum Conference
14 March 2012
A different bank for people who want a different world
Definition
Social investment is any investment activity which has an expectation of both a specified social outcome and an explicit financial return (usually below “market-rate”).
Main difference with traditional types of funding is that there is generally an expectation of repayment!
NAVCA – February 2012
A different bank for people who want a different world
How Does In Work
A different bank for people who want a different world
How Does It Work (2)
A different bank for people who want a different world
Matching appropriate funding mechanisms to financial needs
Venturesome
A different bank for people who want a different world
Types of Social Investment (1)
• Secured loan – using tangible asset at ‘collateral’ – Low risk– Only an option if you have an asset or looking to
purchase an asset – Providers include Charity Bank, Big Issue Invest,
CAF Bank
• Standby/Underwriting facility /Bridging Loan– Similar to overdraft but only available for certain
period and does not ‘revolve’ – Useful as a ‘safety net’ in managing cashflow
situation – Providers include Charity Bank, CAF Venturesome
A different bank for people who want a different world
Types of Social Investment (2)
• Philanthropic Capital – Investment by trusts foundations & philanthropists – Can be “donation” but increasingly expecting return– Often used as a ‘leverage’ and prefers ‘innovative’ ideas– Providers include Esmee Fairbairn & Tudor Trust
• Equity investment /Revenue Participation– Uses sale of shares to finance activity – Depends on legal structure – Currently not common as most orgs are structured as
‘company limited by guarantee’ i.e. No share capital – Providers include Key Fund & Big Issue Invest
A different bank for people who want a different world
Types of Social Investment (3)
• Social Impact Bond • a form of outcomes-based contracts between the
public and private sector.
• Peterborough Consortium• Investors (17) were mostly charitable trusts/foundations
with social & financial investment ethos. • Interventions delivered by consortium of organisations
including St Giles Trust, Ormiston Trust & YMCA• Returns linked to reduction in reoffending amongst
prison leavers. Paid by Ministry of Justice & Big Lottery.
A different bank for people who want a different world
Types of Social Investment (4)
• Charitable Bond – Charities and social enterprises can issue bonds as a form of
long-term debt to expand business operations
– Very much an emerging market; recent example is Scope
A different bank for people who want a different world
Bring It On?
• New source of capital in market where grants are increasingly difficult to obtain.
• But…it needs to be repaid.• Mission driven?• Consider the risks!
A different bank for people who want a different world
Further Information
• www.charitybank.org• www.socialfinance.org• www.philanthropycapital.org• www.knowhownonprofit.org/funding/
social-investment-1• Useful Contacts
Microsoft Office Word Document
A different bank for people who want a different world
Further Information
Jeremy Ince
Telephone: 07787 575023
email: [email protected]
Jeremy [email protected]
07787 575023