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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
A different bank for people who want a different world
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
A different bank for people who want a different world
Assessing loan applications
• Nature of the project• Who benefits• Ability to service borrowing• Quality of the applicant/key staff/governance
A different bank for people who want a different world
Possible Uses For A Loan
• Buying a building• Working capital• Buying equipment• Starting new projects• ‘Last Brick’ Funding• Refurbishing premises• Rescue Packages
A different bank for people who want a different world
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.
A different bank for people who want a different world
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.
A different bank for people who want a different world
Point Blank Theatre CompanyA creative arts organisation
based in Sheffield, it provides
opportunities for artists, offers
performance classes and
reaches out to disadvantaged
people in marginalised
neighbourhoods. It borrowed
£150,000 towards purchase of a
new building in order to expand
and rely less on grants by
becoming more self-sufficient.
www.pointblank.org.uk
Point Blank Theatre, Jon Maiden
“Partly as a result of the credit
crunch, we had hit a lot of brick
walls with other lenders prior to
getting involved with Charity
Bank. We wouldn’t be where we
are now without their faith in
our 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
A different bank for people who want a different world
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 Ince
Telephone: 07787 575023
email: jince@charitybank.org
Jeremy Incejince@charitybank.org
07787 575023
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