Thursday, 7 June 2012

Innovation in funding

The disability charity Scope , led by charismatic Richard Hawkes (ACEVO member naturally)became the first big national charity to issue bonds this week when it closed the first issue of its £20m programme.

The £2m raised by the first tranche of bonds will go towards plans to open 100 new charity shops over the next five years and expand its fundraising programmes to recruit more regular donors.

Investors in the bonds include the investment management firm Rathbones, the grant-making charities the National Endowment for Science, Technology and the Arts and the Esmée Fairbairn Foundation, and the social investor Panahpur.

Investors will earn 2 per cent interest a year and the bonds mature in three years, when their investment will be repaid.

The issue comes after the registration of Scope’s bond programme on Euro MTF Stock Exchange Luxembourg last year.This is exciting news. I hope many more of my members running the big national charities will look at this as a way to expand their work at a time when things are difficult financially. The Social Investment Business is talking to some of their CEOs . This may not be appropriate for all , but we know that the private sector grows through access to capital. As a further tool in the funding box the idea of loans is a sensible option.

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