1 / 9

Achieving financial resilience

Achieving financial resilience. Margaret Bolton - Nominet Trust Academy 16 th October 2012. A particular perspective. Issue looked at from the perspective of charities and other “ established ” voluntary organisations (large and small) seeking to generate more of their own income.

graceland
Download Presentation

Achieving financial resilience

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Achieving financial resilience Margaret Bolton - Nominet Trust Academy 16th October 2012

  2. A particular perspective • Issue looked at from the perspective of charities and other “established” voluntary organisations (large and small) seeking to generate more of their own income. • The objective being to become more financially resilient – defined as having the capacity to withstand financial threats and take opportunities. • Chicken and egg problem – being financially resilient means having resources to invest in your future, but in order to become financially resilient you may need investment.

  3. How social investment can help charities • Investment may be needed to: - increase the yield from existing services and products e.g. by developing a capacity to sell on-line; - develop and pilot new income generating products or services; - meet the set up costs of providing new services perhaps under contract; - buy in new staff/other capacity; - scale up eg social franchise or licensing arrangements; - underpin cash flow (Death Valley curve) • And, it’s not just about enterprise development, it • can support fundraising e.g a membership post or new fundraising initiative; • new fundraising products or mechanisms (Scope Bond).

  4. Some history – the role of charity • Charity Bank est. by CAF in the mid 1990s (charities could not access loans from mainstream banks – lack of understanding of the grant funding model) • Venturesome est. in 2002 by CAF to provide higher risk capital • First Charity Commission guidance on social investment – 2001 (updated CC14 in 2011 ) • Foundations – Esmee Fairnbairn, Northern Rock early provision of loans to charities • Strong tradition of foundation involvement in the US – dates back to the late 60s and the Ford Foundation (seen primarily as a means of building capacity in organisations and communities).

  5. The social investment market – a charity perspective • Grants, loans and quasi equity from across the spectrum (philanthropic to more commercial) • Philanthropic end of the spectrum egs Esmee Fairbairn Foundation, Venturesome • The public sector a major advocate and supporter • Majority secured lending - unsecured risk capital comprises only about 11 per cent • Reports that demand is low relative to potential supply • Not appropriate for every charity or voluntary organisation • Investment readiness a big issue – hence the development of new initiatives.

  6. Social investment - grants • Grants for investment readiness • Cabinet Office, £10m, Investment and Contract Readiness Fund (SIB) • Venture philanthropy (support for core costs plus the provision of expertise) • Impetus (addressing poverty) • Private Equity Fund (work with NEETs) • CAN Breakthrough (helps established social ventures scale up and maximise their impact) • Venture Partnership Foundation (helps to grow charity trading companies) • Mixed packages of grant and non grant finance • Esmee Fairbairn Foundation - Finance Fund • Key Fund (Yorkshire and Humberside)

  7. Non grant financing • Venturesome (established by CAF to provide risk capital to support charitable work) • Big Issue Invest (has supported new trading ventures Barnados and Turning Point) • DoH Social Enterprise Investment Fund – SIB (social enterprises involved in the delivery of health and social care services). • Bridges Ventures (Social Entrepreneurs Fund – for social ventures looking to scale) • FSE Group (pilot Social Impact Co-Investment Fund for SMEs with a social purpose, match angel investing required – charities eligible)

  8. Recent and future developments Funds launched very recently/about to launch: • RBSG Micro Finance Fund (“established third sector organisations”, businesses with clear social and environmental purposes • NESTA Impact Fund (focused on achieving particular outcomes regardless of org. status) • Impact Ventures UK – Berenberg/LGT Venture Philanthropy(described as cross sector impact fund, growth capital for social enterprises). Funds mooted: • Cabinet Office Outcomes Fund (Social Impact Bonds and public sector support ) • Big Lottery Investment Readiness Fund (to be launched next year)

  9. Not to forget other “new” ways of raising funds… • Crowd funding – Justgiving, Kickstarter, Buzzbank, Spacehive • Bonds – SIBs, community bonds, SCOPE bond • IPOs – Crisis • “Charity” Bank Accounts – interest donated. • Endowments – supported by the public sector in the arts. Other – exchange and barter arrangements, sharing staff resources, joint purchasing.

More Related