City Bridge Trust launches social investment scheme
Historic City funder gets charities ready for social investment funding of the future
CITY Corporation charity City Bridge Trust today (Monday) launches a £1million scheme to help charities take advantage of a potential surge in ‘social investment’ from new backers with money for the right cause, structured in a way that suits both.
The ‘Stepping Stones Fund’ for London charities is designed to help those who are interested in the field eliminate barriers for the new kind of investor who expects a social return AND their money back. Volunteers from global City firm UBS are set to support the initiative by helping review and assess grant applications. Details on www.citybridgetrust.org.uk/steppingstones
Mark Boleat, Policy Chairman of the City of London Corporation that looks after the Square Mile business district, said: ‘In today’s environment, some charities looking at new income streams but are stymied by a lack of understanding of what social investors want. This scheme will help charities who want to go down this route understand the way this kind of finance works, and give them the capacity and space to make their own mind up whether to get involved.
Jeremy Mayhew, who chairs the City Bridge Trust, said: ‘We hope new finance will enable innovative thinking on the part of charities. Although the origins of the City Bridge Trust date back 800 years, this project is an excellent example of how we remain at the leading-edge of new thinking in the sector. Again, we are acting as a bridge between London communities – and this ground-breaking work sits alongside our grant schemes that year-in, year-out make a real difference to Londoners.’
Minister for Civil Society Rob Wilson said: “Social investment is designed to help charities and social enterprises do more. Often the first step on this road can be daunting and this new scheme from City Bridge Trust will help London enterprises understand how powerful social investment can be and support them if they decide it is for them.”
Key obstacles for charities considering social investment include:
- Excessive transaction costs that stop many smaller deals from getting off the starting blocks
- Limited information on investment risk, which makes it hard for investors to price investment proposals of £50,000 or less
- Frequently weak price integration of the value of social impact generated
- Pressure from investors looking for a financial return within a short timeframe, and often before the investee is in a position to repay
The trial scheme, which runs parallel to £20m of investment money earmarked for social investment by the trust and its parent body, is made of up £400,000 available for capacity-building, training, etc“£400k for piloting new business models for improved social outcomes” and £200k risk finance to help catalyse social investment.
More information on www.citybridgetrust.org.uk/steppingstones - from noon, Monday.
Greg Williams, Head of Media, City of London Corporation
020 7332 1455
07889 167 205
Bella Longman, Financial Services & Policy Media Officer, City of London Corporation
020 7332 1906
07809 334 327