Big Society Capital Fund launched

Today see’s the launch of David Cameron’s £600m Big Society Capital (BSC) fund to support grassroots social projects. The prime minister is announcing that £400m from dormant bank accounts will be used to help finance the scheme, with a further £200m coming from Britain’s four largest high street banks (Barclays, Lloyds, HSBC and RBS).

The BSC website says that they were established to develop and shape a sustainable social investment market in the UK. This is intended to give organisations tackling major social issues access to new sources of finance to help them thrive and grow. They say that BSC will invest in social investment finance intermediaries (SIFIs), which are organisations that provide appropriate and affordable finance and support to social sector organisations that are tackling some of our most intractable social problems.

Social sector organisations are those driven by a social purpose, rather than the pursuit of profit. These include charities, social enterprises, voluntary and community organisations, cooperatives and mutuals. In the “Vision, mission and activities” document, they say that currently the SIFI’s will be looking to fund organisations working in one or more of the following areas:

* children and families;
* community regeneration;
* disability;
* education;
* employment;
* financial exclusion;
* health and social care;
* housing and shelter;
* infrastructure;
* mental health;
* young people and children.

Big Society Capital official website

The prime minister will say: “For years, the City has been associated with providing capital to help businesses to expand. Today, this is about supplying capital to help society expand. Just as finance from the City has been essential to help businesses grow and take on the world, so finance from the City is going to be essential to helping tackle our deepest social problems.

“Big Society Capital is going to encourage charities and social enterprises to prove their business models – and then replicate them. Once they’ve proved that success in one area they’ll be able – just as a business can – to seek investment for expansion into the wider region and into the country. This is a self-sustaining, independent market that’s going to help build the big society.”

David Cameron launches £600m ‘big society’ fund - Guardian

“The sector faces many problems: very significant cuts to funding filtering through; new types of contracts that threaten, as they have with the Work Programme, to cause chaos for charities; and a massive increase in needs as the state withdraws from great swathes of activity. Yes, BSC has some serious money—£600m—but compared to the size of these problems it is not much. It is also not all going to come on stream at once and is only relevant to a some organisations in the social sector.”

Big Society Capital opens for business - blog from Dan Corry, New Philanthropy Capital