iSE | What is Social Investment?

Are you looking to grow your social enterprise, trading charity or community business? Find out how social investment could be just the thing…

As a business development organisation, we are often asked what grant funding is out there for business growth, be it buying a buying a building, developing a new product, or financing assets. The short answer is, there’s not a lot! Grant funding for capital and growth can be scarce, with most grant making bodies offering project-based funding tackling immediate social issues.

So what alternatives are there?

Well there’s social investment, the use of repayable finance to help an organisation achieve a social purpose.

Firstly, what does this mean? Good Finance say:

“Social investment is not a grant. Social investment is repayable, often with interest. Charities and social enterprises may generate a surplus through trading activities, contracts for delivering public services, grants and donations, or a combination of some or all of these.

This surplus is then used to repay investors. Charities and social enterprise can use repayable finance to help them increase their impact on society, for example by growing their business, providing working capital for contract delivery, or buying assets.

 

Types of Social Investment

There are two types of social investment, although sometimes these can be blended, for example with a grant.

1) Borrowing -debt

Taking out a loan which you agree to repay over a set period of time. Most debt investments are paid back with interest – a fee you pay to the investor for the use of their money.

2) Shares – equity

Selling shares in your organisation to an investor. Equity investors receive a share of any profits paid out by the organisation and get to have a say in how the organisation is run.

Then there’s things like Social Impact Bonds and Social Investment Tax Relief |(SITR).

Social investment gives more freedom, more flexibility and enables you to get the right type of finance to suit your organisation, often with support and mentoring attached. It enables an organisation to create social, environmental or governance impacts within a sustainable business model.

Social investment is not suitable for everyone, and it should be considered alongside other options. It’s important to look at the range of finance options available to your charity or social enterprise before deciding.

Meet the Investors

iSE has joined forces with Good Finance to bring Good Finance LIVE! to the Midlands on 29th October 2019.

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Good Finance LIVE! is a FREE one-day event giving social enterprises, charities and community businesses who are looking for repayable finance the chance to:

-Meet a range of social investors in our marketplace to discuss your plans

-Hear from organisations who have used social investment

-Learn about support programmes and funds available

-Network with peers

The event aims to bridge the gap between investors and investees, providing the space for honest conversations as well as plenty of opportunity to network with peers.

Download the full programme here

We’re delighted to have 16 investors already confirmed for the marketplace. There will be talks and sessions happening throughout the day; attendees will be able to hear directly from great social enterprises on their experience of taking on social investment and in our ‘What’s New’ slot, attendees will have the chance to learn about the support available through the Reach Fund and the Community Shares Booster Programme.

We’re delighted to be bringing this event to the Midlands after a sell-out event in Manchester earlier this year– see the event highlights and video here for more

 

How to book

Apply