SOCIAL INVESTMENT 28 January 2014
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A different bank for people who want a different world SOCIAL INVESTMENT 28 January 2014
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SOCIAL INVESTMENT 28 January 2014 . 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”). - PowerPoint PPT Presentation
Transcript of SOCIAL INVESTMENT 28 January 2014
A different bank for people who want a different world
SOCIAL INVESTMENT 28 January 2014
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 grant 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
InvesteesCharitiesSocial Ent
Intermediaries£
InvestorsIndividuals
Grant MakersGovernmentCorporations
A different bank for people who want a different world
How Does It Work (2)
Service
Income
Surplus
Investor
£££
Growth
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Types Of Social Investment
• Loan Finance• Equity Investment/Revenue Participation• Community Share Schemes• Social Impact Bonds• Charity Bonds
A different bank for people who want a different world
Investment Appraisal
• Background information on the Trustees and Management team
• Business Plan – 3 years forward• Risk Analysis, including contingency planning• Past 3 years annual accounts & annual reports• Financial projections
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Assessing loan applications
• Nature of the project• Who benefits• Ability to service borrowing• Quality of the applicant/key staff/governance
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Possible Uses For A Loan
• Buying a building• Working capital• Buying equipment• Starting new projects• ‘Last Brick’ Funding• Refurbishing premises• Rescue Packages
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Benefits of loan finance
• Enables a project to be delivered mmediately• Can avoid potential increases in costs• Lending against pledges/retrospective grants• Independence• Comes without strings attached• Leverage Match Funding
A different bank for people who want a different world
Case Study 1
• Leeds Action To Create Homes (LATCH)• Est in 1989 - works with homeless people and
volunteers bringing disused and derelict properties back into use.
• £50k loan agreed to refurbish x2 properties.• Income from properties used to fund loan
repayments.
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Case Study 2
• Foresight (North East Lincolnshire) Limited operates throughout North to meet the needs and requirements of disabled people, their families and carers.
• Charity Bank approved a £300k loan to help purchase and renovate an empty care home into 30 flats for young disabled people.
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Point Blank Theatre CompanyA creative arts organisation based in Sheffield, it providesopportunities for artists, offersperformance classes andreaches out to disadvantagedpeople in marginalisedneighbourhoods. It borrowed£150,000 towards purchase of anew building in order to expandand rely less on grants bybecoming more self-sufficient.www.pointblank.org.uk
Point Blank Theatre, Jon Maiden“Partly as a result of the creditcrunch, we had hit a lot of brickwalls with other lenders prior togetting involved with CharityBank. We wouldn’t be where weare now without their faith inour project.”
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
What is Charity Bank?
• A Bank that is also a Charity
• Our mission is to transform the future of charities and social businesses
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Charity Bank – Key Facts
• Specialist Lender to Social Enterprise Mkt.• Loans £50k - £2m• Secured & Unsecured• Rates between 5% & 7.5%• Term up to 25 years• Generally no penalties for early repayment• Local representation• Loan book c£60m• Open for new business
A different bank for people who want a different world
Further Information
Jeremy InceTelephone: 07787 575023
email: [email protected] Ince
[email protected] 575023
