Crowd Match Fund | Big Society Capital

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Crowd Match Fund

Strategy area | 

A unique £10 million Crowd Match Fund to allow the public to invest directly in charities and social enterprises.

Social impact 

Crowdfunding platforms offer a new way for social organisations to raise finance from the public. These platforms are not only about raising finance, they also help to build and bind communities by allowing group of individuals to invest in a common cause. Crowdfunding has enabled social ventures to access new backers, rather than relying solely on support from friends and family. Although the donation-based crowdfunding market has grown considerably over the last 5 years, investment based crowdfunding for the social sector is still developing.

The facility will aim to encourage greater participation by the crowd in funding socially motivated projects, enable charities and social enterprises to raise more capital and encourage more platforms to engage with SITR. It is expected that the presence of a match fund will build confidence and momentum for Issuers and Investors.

The Issuers and platforms will report back directly to Big Society Capital on social impact.

Financial rationale 

The £10 million fund will see Big Society Capital match crowdfunded investments made by individuals into Social Investment Tax Relief (SITR) eligible charities and social enterprises. It will be the first of its kind to match different investments made by the public across the social sector. Private individual investors may qualify for SITR which offers a 30% tax break. The Chancellor announced an increase in the amount that younger charities and social enterprises can raise through SITR to £1.5 million from April 2017. 

Big Society Capital has delegated the investment decision-making responsibility to three partner platforms: Ethex, Community Chest and Crowdfunder. Based on a pre-determined set of criteria, the participating platforms can call on the facility to match alongside individual investors into eligible projects. 

Market development

A key objective of the Crowd Match Fund is the potential for market development. We hope that our three partners will continue to support the growth of the social investment market both by enabling the general public to contribute to social change through their own personal finance choices and allowing grassroots organisations being able to access the finance they need to support their local communities.

There is not one model of mass participation in social investment, but a range of examples and approaches that engage members of the public in different ways. The Crowd Match Fund, therefore, is supporting three different approaches by backing three distinct platform partners and will match eligible investments made by individuals across Ethex, Community Chest and Crowdfunder. These three platforms were selected in a competitive process that assessed their ability to deliver against the following key criteria: background and track record, ability to deliver and future pipeline. A key objective for this facility will be how the results and data is used to help direct future iterations of this fund and others in this sector.

Investment details

  • Big Society Capital investment: £10 million
  • Current managers and co-investors: Ethex, Community Chest and Crowdfunder
  • Other co-investors: individual investors
Last updated | 
15 February 2017