The Government, backed by the High St banks, has launched the Big Society Bank, to support organisations that invest in the sector, helping them:
- Provide a greater range of financial services to social sector organisations;
- Raise more money for onward investment into the sector; and
- Become more sustainable and resilient themselves.
The bank, to be known as ‘Big Society Capital’ will, the Government says, also be a champion for social investment with policy makers, investors, stakeholders in the sector and the public at large. Venture capital pioneer, Sir Ronald Cohen, will serve as the unpaid, interim Chair of Big Society Capital Limited, the operating company of the group, until it is fully operational. Nick O’Donohoe, formerly Global Head of Research at JP Morgan, will become Big Society Capital’s first CEO.
The Government insists Big Society Capital will play a critical role in speeding up the growth of the social investment market. Socially orientated financial organisations will have greater access to affordable capital, using an estimated £400million in unclaimed assets left dormant in bank accounts for over 15 years and £200million from the UK’s largest high street banks. Big Society Capital and the four Merlin banks have also come to an agreement on heads of terms for the banks’ £200m investment in the company.
Couple of quotes, first of all from Prime Minister David Cameron:
“When I announced the idea of a Big Society Bank, I wanted to help social enterprises and other groups to grow and expand their vital work. I am delighted that with today’s announcement of the organisation’s first investment, this vision is becoming a reality. I’ve seen the amazing work that Britain’s social enterprises already do to tackle some of our country’s most intractable problems.
“I believe that Big Society Capital will play a major role in injecting significant resources and financial innovation into these social enterprises, while at the same time attracting further funding from charitable foundations, private individuals and other investors. That’s why I wholeheartedly welcome today’s launch and the organisation’s first investment.
And also from Cabinet Office Minister Francis Maude:
“There are few moments like this when something happens that can really change the world. We’ve all heard about a small charity or social enterprise sweeping away entrenched local social problems. But we have not seen a significant commitment to help social innovations grow and be implemented on the national stage until now. Big Society Capital will undoubtedly change this and unlock the money that charities and social enterprises need to grow when a big opportunity comes along. This government is proud to support this achievement. I want to thank Sir Ronald Cohen and Nick O’Donohoe and everyone else, including the banks, who have made this a reality so quickly.”
There is more detail on the Cabinet Office website