What is Social
Social investment is the use of repayable finance, both grant and loans, to help Community Organisations generate a financial surplus to achieve social objectives.
Charities and social enterprises can use repayable finance and their business acumen to create social value – through business growth, development of assets or expanding working capital to increase scope and scale-up of activities.
Social investment is repayable finance and is used to create a surplus through operational activities, delivering health and wellbeing services, attracting grants and fulfilling contracts, or hosting events. The surplus generated is used to repay the investment.
Investor Readiness -
In most cases the community organisations are asked to introduce a more enterprising way of operating, that not only generates extra income, but also achieves greater social value linked to the funders’ objectives.
Coaching Communities is a development programme drawn from business start-up principles:
– Business Environment Analysis
– Corporate Governance
– Corporate Strategy
– Leadership Development
– Financial Planning
– Effective Communication
– Strategic Marketing
– CSR through Shared Value
– Managing People
– Succession Planning
Through this process the community organisation will be introduced to an appropriate funding partner and mutually beneficial social objectives will be incorporated into the business planning process.
Preparing the organisation to operate as a social enterprise will increase income streams and increase the social impact that the organisation delivers.
Types of Funding -
Blended Social Investment
(Grant & Loan)
Blended Funding is an investment package that combines a portion of grant that doesn’t need to be repaid; and a loan that does need to be repaid. All the packages are bespoke and specific to the project or organisation and social investor;
One example could be:
An organisation has identified a way of creating new income streams from physical activity programmes linked to their current operations but needs enhanced facilities. If the community organisation wishes to apply for funding they could be offered a ‘blended investment’ of, mixed grant and loan that would be repaid over 5 years or possibly longer.
This provides the organisation with funds to invest, generating the operational surplus needed to repay a portion of the initial loan. The amount of the grant would vary (20-30%) and be dependent on size of loan, length of loan etc. However all funders are specifically looking to help your organisation generate sustainable Social Value.
A withdrawable, non-transferrable equity investment into a cooperative or community benefit society. It is a form of equity because the investors get a share of the organisation.
An investment that is raised via an online platform and not secured against an asset (a building or equipment). A ‘crowd’ of individual investors put (mostly) small amounts towards a loan to your organisation and you repay it on an agreed basis, usually with interest on top.
Social Investment Tax Relief
Social Investment Tax Relief is a tool that can be used in combination with other products.
A tax break for individual investors into charities and social enterprises. Investors get 30% of the cost of their investment off their next income tax bill so, provided certain conditions are met, if an investor makes a £100 investment into your organisation, they can claim £30 back. Investors can’t sell their shares or have their loan repaid for 3 years, although they can receive interest on loans.
If you want to grow your organisation in a planned way, rather than relying on chasing grants each year then give us a call!