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SOCIAL INVESTMENT 28 January 2014

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”).

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SOCIAL INVESTMENT 28 January 2014

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  1. SOCIAL INVESTMENT 28 January 2014

  2. 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

  3. How Does In Work

  4. How Does It Work (2)

  5. Types Of Social Investment • Loan Finance • Equity Investment/Revenue Participation • Community Share Schemes • Social Impact Bonds • Charity Bonds

  6. 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

  7. Assessing loan applications • Nature of the project • Who benefits • Ability to service borrowing • Quality of the applicant/key staff/governance

  8. Possible Uses For A Loan • Buying a building • Working capital • Buying equipment • Starting new projects • ‘Last Brick’ Funding • Refurbishing premises • Rescue Packages

  9. 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

  10. 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.

  11. 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.

  12. Point Blank Theatre Company A 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.”

  13. 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!

  14. What is Charity Bank? • A Bank that is also a Charity • Our mission is to transform the future of charities and social businesses

  15. 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

  16. Further Information Jeremy Ince Telephone: 07787 575023 email: jince@charitybank.org Jeremy Ince jince@charitybank.org 07787 575023

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