The Government’s call for evidence on Social Investment Tax Relief (SITR) will close one week from today. With grant funding becoming a scarce resource and the demand for small amounts of patient, unsecured capital growing SITR is more important than ever.
SITR can be used by social enterprises and charities to raise investment from individual investors that offers a window of at least three years before repayments start. The biggest draw, however, is the subsidised investment returns, created by offering investors a 30% tax break on their investments which off-set the risk of investing.
Melanie Mills, Senior Director of Social Sector Engagement at Big Society Capital, commented: “SITR is significant in terms of reach and opportunity: both for businesses delivering a social impact and investors who want to do good with their money. This consultation is the best chance social enterprises and charities currently have to voice their opinion to the Government about the need to improve their ability to access patient, affordable capital. Big Society Capital will also be responding, and laying out what we believe to be the most important changes that must be made to SITR to make it work for social enterprises and charities trying to access social investment. We would encourage all social enterprises and charities to respond to the consultation. We know that many simply don’t have enough time available, and so we have provided a template response form to the consultation which can be found on our website.”
Mark Grant, Chief Executive of Action Homeless, said: “We believe SITR could be a game-changer. But it needs to be simplified and take into account the core social purpose of what the investment is being used for. Many social enterprises are frustrated that the social investment market seems to be focused on offering us expensive loan finance. But the current government consultation on SITR is a chance to influence it and make it a much more flexible and cost-effective way of raising investment direct from the public. Consultations always seem like out of reach, central government-motivated processes. We might even be cynical enough to believe our views won’t make a difference but we can’t protest yet do nothing. And so, at Action Homeless, we will be taking the time to let government know our views and if you have a strong opinion on being able to access cheaper, riskier and patient investment, I would encourage you to take ten minutes of your time to do the same with the hope this will be time well spent.”
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NOTES TO EDITORS
Big Society Capital is gathering evidence to inform the government’s consultation on SITR. We would like to encourage all social enterprises and charities to respond to our short poll about their trading plans & finance needs.
The poll can be found here and will take less than five minutes and respondents will then be signposted to the relevant template response.
ABOUT BIG SOCIETY CAPITAL
Big Society Capital improves the lives of people in the UK by connecting social investment to social enterprises and charities.
We know that investment can help social enterprises and charities achieve more. We believe the greatest chance to improve lives comes when investors and enterprises are both motivated by social mission.
We engage with investors, fund managers, social enterprises and charities to make it easier to use social investment. With our co-investors, we have made over £1.7bn of new capital available to organisations with a social mission, through investments into fund managers and social banks. We have a special focus on: providing homes for people in need; supporting communities to improve lives; and early action to prevent problems.
ABOUT ACTION HOMELESS
Action Homeless is a thriving local charity (no.702230) and social enterprise committed to improving the lives of people affected by homelessness. We have been based in Leicester for over forty years and help individuals and families from across the city and county. Last year alone, we provided emergency housing and specialist support to over 400 people.
Our approach to tackling homelessness goes beyond providing a roof (although we do recognise this as a vital first step). Everyone that walks through one of our front doors has access to a wide range of services which aim to tackle the causes and consequences of their homelessness. Our expert team of staff and volunteers work hard to ensure people leave Action Homeless with somewhere to call home and the skills and means to maintain their independence.
PRESS CONTACT
Kathryn Mortimer, Press Officer, Big Society Capital
T: 020 7186 2537, E: kmortimer@bigsocietycapital.com