Phil Hope, Minister for the Third Sector, has announced that a
proposal to set up a £10 million Risk Capital fund for social
enterprises will go ahead.
The fund will be the first of its kind for social enterprises
and aims to particularly benefit them at the critical start up and
early growth stages of developing their business.
Through extensive consultation, social enterprises have told the
Government that equity or equity-like investment is a crucial
finance option for the long-term sustainability of the sector.
Therefore, the fund will be run as a 'pathfinder investment scheme'
where the Government's £10 million investment will be matched by
private and independent investors. This aims to ensure a
legacy by building relationships and understanding between social
enterprises and commercial investors.
Phil Hope, Minister for the Third Sector, said: "I'm extremely
excited about this fund and what it means for the long-term
development of social enterprise as a mainstream business option.
Investors are increasingly looking to maximise their profits whilst
also being able to benefit the wider world. I hope that the legacy
of this fund will be to show investors the potential of ethically
driven investment. Although this method of investment will not suit
all social enterprises I am encouraged that this initiative will
open up social enterprises to a greater choice of investment
opportunities".
The Government will appoint one or more independent fund
managers following a tender process. Under the rules of the
investment fund the Government will make the same return on
investments as independent investors. It is expected that the fund
will open to applications in the autumn.
WHAT IS A SOCIAL ENTERPRISE?
The Government defines social enterprises as 'businesses
with primarily social objectives, whose surpluses are principally
reinvested for that purpose in the business or in the community,
rather than being driven by the need to maximise profit for
shareholders and owners'.
FURTHER INFORMATION
For further information on the Social Enterprise Action Plan
'Scaling New Heights' - which aims to open the door to 1,000's of
new social enterprises, raise awareness of what they can achieve,
and encourage more people to make a difference either by
involvement or investment - please visit the Cabinet Office website
at:
www.cabinetoffice.gov.uk/third_sector/social_enterprise/action_plan
For further general information on the third sector please visit
the Cabinet Office website at: www.cabinetoffice.gov.uk/third_sector
which includes information on funding and support, community
action, partnerships, regulations, volunteering, giving, public
services and research.
For further information on the Social Enterprise Coalition - the
national body for social enterprise, please visit: www.socialenterprise.org.uk