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£200,000 government pilots to help social enterprises raise private sector investment

Ed Miliband, Minister for the Third Sector, today announced that Charity Bank and Community Innovation UK will lead pilot programmes worth almost £200,000 to investigate how to encourage private sector investment in social enterprise.

Mr Miliband congratulated both organisations – who bid for the projects in open competition – and welcomed the fresh insights their work will offer social enterprises looking to gain outside investment.

Speaking at Voice 07, the social enterprise sector's annual conference, Ed Miliband said:

“Access to finance is absolutely key to ensuring the growth of social enterprises, and I am delighted Charity Bank and Community Innovation UK have taken on this incredibly valuable research.

“I eagerly await the outcome of their investigations – which will deepen our understanding of how to increase the range of finance available for social enterprises, and successfully broaden the research base of the sector.”

The projects will try to establish the scale of demand for private sector investment among social enterprises, and which investors may be willing to accept a mixture of financial and social return on their investment.

Welcoming the Government's decision, Malcolm Hayday, Chief Executive of Charity Bank, said:

“This funding will enable Charity Bank to investigate the range of financial products that are required by social enterprises and the willingness of potential investors to invest in them.”

Similarly, Tim Reith, Director of Community Innovation UK, said:

“The support of the Office of the Third Sector gives us an opportunity to build vital networks of business angel investors to invest in social enterprises and to develop the capacity of social enterprises to take on this type of investment.”

The findings of the projects – which will run until March 2008 – will be made widely available to inform the social enterprise and broader finance sectors.

Notes to editors:

1. Any media enquiries on the information in this press notice, please contact: Campbell McDonald: 020 7276 0311(Cabinet Office press office).
2. The pilot being led by Community Innovation UK is worth roughly £100,000 (£85,000 plus VAT), while the pilot led by the Charity Bank is worth £90,000 without VAT.
3. A call for expressions of interest was first issues in July 2006. From 25 initial expressions of interest, 12 organisations were invited to submit full proposals, 10 were eventually received. The Office of the Third Sector had originally intended to support three pilots, however this was superceded by the announcement made in the Social Enterprise Action Plan on November 16 to launch a £10m fund to support social enterprises.
4. Improved access to finance is a key objectives of the Social Enterprise Action Plan launched in November 2006. For more info, including copies of the plan, please go to: http://www.cabinetoffice.gov.uk/third_sector/social_enterprise/; or ring 0845 015 0010.
5. In recognition of the increasingly important role the third sector plays in both society and the economy, the Prime Minister created the Office of the Third Sector (OTS) in May 2006 to drive forward the Government's role in supporting a thriving third sector, and join up sector-related work across government http://www.cabinetoffice.gov.uk/third_sector/
6. For information on Community Innovation UK, contact 0207 234 3622 or see www.communityinnovation.org.uk [External website]
7. For further information on Charity Bank see: http://www.charitybank.org [external website]

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