Investors to be given opportunity to invest in Big Society

The first social bond fund, which will invest in charitable and social projects, is set to launch in January. It has been reported that investors could see returns of 4% a year.

The collaboration between Threadneedle and Big Issue Invest was announced earlier this year, with social investment bank Big Society Capital (BSC) providing £10m of initial investment.

According to the Telegraph, the fund aims to provide investors with a return of 4%. Speaking to the newspaper, Nick Hurd, minister for civil society, said, “This is a chance for people with some money to save to put it into good causes and do some good and get a decent return at the same time.”

The Big Society was a flagship policy idea during the Conservatives’ general election campaign in 2010. The aim of the Big Society was to empower local people and communities by taking power from politicians and giving it to them. It also stated that a priority was to support co-ops, mutuals, charities and social enterprises.

The idea was criticised for being vague with some going as far as suggesting it would mean further privatisation. Since the election there has also been a lack of public sector reforms to promote the Big Society concept.

BSC was launched in 2012 by the government to help finance projects. It was the first social investment institution of its kind and aimed to grow the social investment market under the Big Society banner. The BSC’s mission was to act as a catalyst for sustainable social investment and to make it easier for social entrepreneurs to access the capital they needed.

Julian Parrott, partner at Ethical Futures, previously told Blue & Green Tomorrow that whilst in principle the BSC was a welcomed development it was “really only a halfway house”.

However, it is hoped that the launch of the fund in January will lead to other larger banks arranging social investments and benefitting their local communities. Hurd added, “What we want to actively encourage is other banks, other financial institutions to look at this closely to see if they can make similar offers to savers.”

Further reading:

‘Research council’ formed by industry leaders to deepen social investment market

David Cameron’s social impact investment speech: full text

Big Society Capital: good idea, wrong format

Threadneedle and Big Issue Invest join forces for UK Social Bond fund

Sir Ronald Cohen: measuring of social investment outcome a ‘breakthrough’