overview

2. overview A new £30m fund being subscribed over three years to invest in building the capacity, capabilities and sustainability of third sector organisations. • outcomes-focused investment priorities. • investing over 3 years (2008 – 2011) and beyond. • a fundamentally different approach to previous grant regimes. • investments tailored to individual organisations requirements. • loans, ‘patient’ capital, and strategic investments.

3. target characteristics established third sector organisations located and trading in Scotland which reinvest surpluses for social or environmental purposes and:- • have been operating successfully, partly through income generation, for at least three years. • have established successful experience in public service delivery or trading in other markets. • have potential to grow their turnover and/or become financially sustainable. • are ‘investment-ready’ in terms of management, governance and financial position.

4. ineligible • organisations with no track record of generating income other than grants. • organisations that are insolvent or at risk of insolvency. • proposals that seek to replace existing debt finance. • subsidiaries of public bodies (e.g. local authorities). • housing construction and management operations of registered social landlords (RSLs). • proposals that relate to the on-going delivery costs of services or projects. • proposals that would normally be funded by commercial loan finance or other funding sources. • organisations where the beneficiaries live outside Scotland.

5. investment priorities 2008/09 investment priorities will focus on organisations with social missions that address issues of: • employability • environmental action • the underlying causes of health inequality Other priorities will emerge as the fund develops.

6. investment products investments will be tailored on a case by case basis and may contain a mix of :- • loans - business plans will assessed for loan first (including commercial loans) before any other investment is considered. • risk/’patient’ capital - devised to deliver a mix of financial and social returns. • strategic investments - (non-repayable) amounts based on social outcomes and will not comprise more than 50% of any funding package • development support – for organisations ‘almost but not quite’ investment-ready. SIF will consider funding to pay for accounting or legaladvice/support in relation to areas such as marketing, human resources,

7. investment process • initial screening against published investment criteria to establish eligibility and ‘investment-readiness’. • collection of brief details of the organisation and the investment being sought. • discussion/feedback to assess ‘fit’ with investment priorities. • rigorous assessment of business plan, focused on four elements – business model – organisational development – financial stability – projected social outcomes. • development of investment package, submission to investment panel with recommendations. • approval and documentation • monitoring and evaluation.

8. Social Investment Scotland Second Floor 1/2 St Andrew Square Edinburgh EH2 2BD 0131 558 7706 www.socialinvestmentscotland.com