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Good returns while doing good

Social enterprise fund open for business

Nick KuenssbergInvestors now have the opportunity to invest their money in a pioneering fund which aims to provide a social, as well as financial, return on investment.

SIS Community Capital, Scotland’s first social investment fund backed by social investment tax relief, was announced on 25 April and opened for business this week.

Developed by Social Investment Scotland (SIS), the fund allows individuals to invest in a vehicle which provides tax relief but also helps to support the creation and growth of charities, community organisations and social enterprises which have the capability to make sustainable social and environmental impacts.

The fund is aiming to attract an initial tranche of up to £500,000 investment from UK based investors. The money will be used to support between five and ten social enterprises in Scotland. Tax relief for investors will be provided in the form of a 30% relief on their investment from their income tax liability.

NCM Fund Services, based in Edinburgh, will be responsible for ensuring compliance of all activities of the fund as required by the regulator, the Financial Conduct Authority.

Nick Kuenssberg, chairman of SIS (pictured), said: “Providing parity in tax relief for investing in social enterprise is a significant milestone in opening up a new source of capital for this sector.

“We know that there’s a demand from investors in making ethical investments, but to date there has been very little financial incentive. SIS Community Capital has an opportunity to blaze a trail for social investment in the UK.”

Alastair Davis chief executive Social Investment Scotland, said: “Since announcing this fund to the market, we’ve received significant interest from UK investors. With the launch of our Information Memorandum, they now have a window of opportunity to become part of a new and innovative way of helping to support and grow Scotland’s thriving social enterprise sector.”

Gavin Francis, managing director, of Worthstone, a social impact investment resource for financial advisors, added: “I believe this product has the potential to change the landscape for the social investment market and will help lead the way in the UK and Europe.”

Research from Worthstone and Big Society Capital in 2013 suggested that the investor market could generate £165m of new social investment capital over the next three years and £480m over the next five years. The report was based on research by Ipsos Mori highlighting unmet appetite for social investment amongst High Net Worth Individuals, who wanted their money to ‘do good’.

SIS was established in 2001 to provide a new finance model for Scotland’s charities and social enterprises. Since then it has invested more than £43m in almost 200 organisations across Scotland, becoming Scotland’s largest community development finance institution.

Projects that have benefited are worth in excess of £60m and tackle a range of social issues including employment and training, health, arts and culture, care and the environment.

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