Alongside grant making, the City of London has established a £20m Social Investment Fund to support charitable organisations that want to access funding through social investment.
What is social investment?
Social investment is a source of funding that aims to generate, for the investor, both a:
Social return – the investment creates a positive social impact for people, communities or the environment.
Financial return – Unlike a grant, the investment is expected to be returned to the investor, so an organisation needs to be able to generate sufficient income from its operations to repay the funding, with potentially additional interest, over time.
Social Investments are commonly made as secured loans, unsecured loans, bonds, loan guarantees, quasi equity (taking a share in the extra revenue generated as a result of the investment) and occasionally, equity.
The City of London and Social Investment
Our first Social Investment, back in 2010, was in the Allia East London Bond, with £100,000 provided as an interest-free sum for a 5 year period. This was used to provide much-needed quality affordable social housing, whilst also generating funding for community regeneration centres the Bromley by Bow Centre and Community Links.
Building on this, the City of London established in 2012 a £20m Social Investment Fund. With the aim of positioning the City of London as a leader in social investment, develop the UK as a global centre for social investment and by so doing, help to grow the market. Whilst directly supporting charitable organisations in achieving positive social impact.
You can see all the social investments made by the fund since then here. The fund has invested in a diverse range of organisations who work to support a variety of different beneficiary groups across the UK.
More recently, the Trust established the Stepping Stones Fund, a unique grant programme to support charitable organisations in Greater London looking to access social investments as a funding source in the future.
Further information on ways the City of London is developing the social investment marketplace and supporting social enterprises can be found on the City of London Corporation website.
We’re listed on Goodfinance.org.uk, a website to help charities and social enterprises navigate social investment