Finance Fund

In 2008 we launched the £21 million Finance Fund to make investments that combine a social and financial impact.  It has three broad objectives. 

The first is to make our money work harder (because the funds can be recycled). The second objective is to support the development of new sources of funds for the voluntary sector by attracting investment finance even though it may achieve lower rates of return than more conventional investments.  Our third objective is to help grow and support this fledgling market in keeping with our interest in the sustainability of the voluntary sector and our commitment to taking risks.

These three objectives have resulted in our current portfolio.  The Finance Fund currently (at December 2012) has 45 investments representing £11.9 million of funds drawn and another £7.5 million in commitments made that have not yet drawn down.  Our investments include indirect investments made via intermediaries such as Bridges Ventures and Big Issue Invest, plus a mix of direct investments to charities and social enterprises.

We think of our Finance Fund activities as 'social impact first'.  Therefore 'mission' is primary in our decision- making.  However, they are also investments and so we look for return of capital and indeed some return.  The Finance Fund is overseen by a panel, drawing on both grant-making and investment experience.  This unique space means we consider our Finance Fund investments on their own terms rather than considering them alongside grants or mainstream investments.

Over the last few years the pace of growth in the social investment sector has increased and we are now beginning to see some of the infrastructure needed for the sector to work well.  A range of intermediary funds and fund managers now exist to manage and channel a flow of funds to the sector, and new players such as Big Society Capital are beginning to have an impact.  Advisory services and market exchange opportunities are also emerging.  These aim to help charities and social enterprises that seek funds to structure their requests and think about what taking repayable funds means to them.  Brand name charities such as Scope and Oxfam are coming forward to raise social investment, bringing new profile and strong organisations to what has historically been an innovative but fragile sector.  We also see increased interest from our fellow trusts and foundations, with established players in this space joined by a range of others.

We are looking to review our impact, performance and the strategic direction of the Fund in the course of 2012 with an eye to where our funds might best be employed in this increasingly dynamic area of our work.

Guide to applying