Big Society Capital is an independent financial institution. We are authorised and regulated by the Financial Services Authority (FSA). Our aim is to develop and shape a sustainable social investment market in the UK, giving organisations tackling major social issues access to new sources of finance to help them thrive and grow.
The statute under which BSC was established defines third sector (or social sector) organisations as those that “exist wholly or mainly to provide benefits for society or the environment”. BSC has interpreted this to include regulated social sector organisations such as charities, Community Interest Companies or Community Benefit Societies as well as some profit-making companies or enterprises that have a clear social mission where these entities can meet the specific criteria set out in the attached Governance Agreement.
We can only invest in social investment finance intermediaries (SIFIs). These are organisations that provide, facilitate or structure financial investments for social sector organisations and/or provide investment-focussed business support to social sector organisations. So we won’t consider proposals from frontline social sector organisations, by which we mean social enterprises, charities and voluntary and community organisations providing services/goods directly to people and communities.
We only invest in SIFIs that are registered in the UK and that provide finance and other support to social sector organisations that primarily benefit people and communities in the UK. You must have a strong management team, good corporate governance systems, a robust business plan and financial model, and a clear social mission with systems for monitoring your social impact.
No, we invest in SIFIs registered in the UK that provide finance and other support to social sector organisations that primarily benefit people and communities anywhere in the UK.
We do not invest in SIFIs without a base in the UK or which provide finance and support to social sector organisations that primarily benefit people and communities outside the UK.
The Big Society Capital Group is made up of three separate organisations:
The Big Society Trust is the holding company which has the sole object of protecting the social mission of:
Big Society Capital Limited, which is the operating company of the Group; and
The Big Society Foundation, which will be constituted to receive charitable donations and develop grant programmes to support the Group’s mission.
The Big Society Trust acts as a shareholder in Big Society Capital Ltd. It ensures that BSC remains true to its social mission to grow the social investment market in the UK.
Big Society Capital provides organisations tackling major social issues with access to new sources of finance by investing in social investment finance intermediaries (SIFIs). These are organisations that provide appropriate and affordable finance and support to social sector organisations. By investing is SIFIs, and growing and strengthening the social investment market as a whole, we can generate more money for the social sector than we can bring in alone.
We invest in the following ways:
Capitalisation and balance sheet growth: injecting core equity capital to build stronger, larger SIFIs that are able to raise further private investment and so provide more capital to the social sector;
Risk and working capital: acting as lead or cornerstone investor in the developing and piloting of financial products and funds that provide risk and working capital to the social sector;
Sustainability and operational growth: providing medium to long-term capital to SIFIs to enable them to achieve sustainability and scale and so increase the volume of affordable finance that they can offer the social sector;
Market mechanisms and infrastructure: acting as lead or cornerstone investor and/or providing underwriting for the development of market infrastructure;
Advice, skills and information: providing direct equity and loan investment to SIFIs developing and providing financial advisory/corporate finance services to help social sector organisations build the skills and capacity required to take on investment.
Big Society Capital will be funded over five years with equity investments of up to £400m by The Big Society Trust and up to £200m by the four major UK high street banks.
The equity investment by The Big Society Trust will be funded with the English share of dormant accounts released through the Dormant Accounts Scheme. These are account balances that have been left untouched in bank and building societies for 15 years or more.
Barclays, HSBC, Lloyds Banking Group and RBS have also agreed to make equity investments of £50m each in Big Society Capital.
We seek both a social and a financial return from every investment we make. The balance of social and financial return will be different in each case and we will take into account the social and financial risk of each investment.
The minimum size of investment we make is £500,000. The maximum we will make initially is £15m.
Expression of Interest: firstly you will need to submit an Expression of Interest form providing information about your organisation, the type of investment you are looking for, how much and for what. Application: If we decide to take your proposal forward we will send you a full application form which will ask you for more information including a full business plan and financial model.
Due diligence: If your application is successful we will undertake a thorough due diligence on your proposal. This will include a visit to your offices, interviews with staff and board members, scenario testing of your financial model and a review of your social impact reporting
The minimum size of investment we make is £500,000. The maximum we will make initially is £15m.
Expression of Interest: firstly you will need to submit an Expression of Interest form providing information about your organisation, the type of investment you are looking for, how much and for what. Application: If we decide to take your proposal forward we will send you a full application form which will ask you for more information including a full business plan and financial model.
Due diligence: If your application is successful we will undertake a thorough due diligence on your proposal. This will include a visit to your offices, interviews with staff and board members, scenario testing of your financial model and a review of your social impact reporting.
Barclays, HSBC, Lloyds Banking Group and RBS have agreed to make equity investments of £50m each in Big Society Capital. They made this commitment in the context of wider discussions (known as the ‘Merlin’ agreement) with the Government on increasing their positive contribution to society and to economic recovery.
We aim to let you know within two weeks of receiving your Expression of Interest form whether we would like to take your proposal forward.
Once we have all the information we need in your full application form, we will normally let you know whether we have decided to take your proposal forward to due diligence within two weeks. The due diligence process can take some time to complete, particularly if we are investing alongside other investors, but we will keep you informed at all times.
The Merlin Banks are investing permanent equity in Big Society Capital (BSC). They will own a maximum of 40% of BSC shares (10% each), but will always remain a minority shareholder with their collective voting rights capped at 20%. If BSC makes a surplus and decides to distribute a dividend, the Merlin Banks will have a right to dividends proportionate to their equity contribution to BSC. The Merlin Banks’ shares also carry a right of preference in the event of BSC winding up.
Big Society Capital’s purpose is to achieve its social mission rather than to maximise profits for shareholders. We are governed by our social mission and we reinvest the majority of any surplus we generate in our mission, either through BSC itself or the Big Society Foundation. The Merlin Banks also have a right to a share of any surplus we generate, proportionate to their equity contribution to BSC.
The Big Society Capital Investment Committee makes investment decisions for all investments up to £10m. The Investment Committee is chaired by the Chief Executive of BSC and includes the Chief Investment Officer, Chief Operating Officer, Chief Financial Officer, Director of Strategy and Market Development, and Senior Investment Analyst.
Investment decisions above £10m are made by the Board of Directors of Big Society Capital on the recommendation of the Investment Committee.
Big Society Capital is an independent organisation. A Government appointed representative sits on the Board of the Big Society Trust.
The ‘Big Society Bank’ was the term used by the Government to describe the policy concept for an organisation using money from dormant accounts to develop and grow the social investment market. Big Society Capital is the name of the actual organisation established to fulfil this role.
We are working with the sector at large to develop a principles and performance based impact measurement framework. We hope that this will inform the development of social impact measurement within the social investment market. It will also enable us to understand and evidence the impact that our investments have on the social investment market and on the frontline social sector. We will report annually on the social impact of our investments.
You can submit an Expression of Interest at any time.
The Big Society Investment Fund was set up by the Big Lottery Fund at the request of the Government. Its purpose was to make initial investments using dormant accounts money before Big Society Capital was fully established, ensuring that dormant accounts money was used quickly . The Big Society Investment Fund agreed seven ‘in-principle’ investments which have now been transferred to Big Society Capital.
You can submit Expressions of Interest for more than one proposal. We will assess each on its own merit. We will also consider whether you have the capacity to manage more than one investment.
We only invest in SIFIs. We don’t invest directly in frontline social sector organisations. This is because, by supporting SIFIs to grow, we can help them to make more connections between socially motivated investors and social sector organisations. This brings more capital into the social sector than BSC alone could provide and will increase long term impact.
It response to the Government’s consultation on the design a function of a social investment wholesaler (or ‘Big Society Bank’), the social sector was very clear that any such institution must act as a wholesaler and provide capital and support to the existing market to enable it to grow. It should not compete with or crowd out existing actors in the market. Investing directly in social sector organisations would put Big Society Capital in direct competition with existing social investment finance intermediaries which would distort rather than grow the social investment market.
Big Society Capital needs to be financially self-sufficient. This means that we must be able to cover our operating costs and make investments in line with our mission. This is important because growing the social investment market is a long-term project. So Big Society Capital needs to be around for many years and needs a business model that protects our long-term viability and independence. In practice this means that we will not make grants.
We can only invest in social investment finance intermediaries (SIFIs). These are organisations that provide, facilitate or structure financial investments for social sector organisations and/or provide investment-focussed business support to social sector organisations. So we won’t consider proposals from frontline social sector organisations, by which we mean social enterprises, charities and voluntary and community organisations providing services/goods directly to people and communities.
We only invest in SIFIs that are registered in the UK and that provide finance and other support to social sector organisations that primarily benefit people and communities in the UK. You must have a strong management team, good corporate governance systems, a robust business plan and financial model, and a clear social mission with systems for monitoring your social impact.
No, we invest in SIFIs registered in the UK that provide finance and other support to social sector organisations that primarily benefit people and communities anywhere in the UK.
We do not invest in SIFIs without a base in the UK or which provide finance and support to social sector organisations that primarily benefit people and communities outside the UK.
We invest in the following ways:
Capitalisation and balance sheet growth: injecting core equity capital to build stronger, larger SIFIs that are able to raise further private investment and so provide more capital to the social sector;
Risk and working capital: acting as lead or cornerstone investor in the developing and piloting of financial products and funds that provide risk and working capital to the social sector;
Sustainability and operational growth: providing medium to long-term capital to SIFIs to enable them to achieve sustainability and scale and so increase the volume of affordable finance that they can offer the social sector;
Market mechanisms and infrastructure: acting as lead or cornerstone investor and/or providing underwriting for the development of market infrastructure;
Advice, skills and information: providing direct equity and loan investment to SIFIs developing and providing financial advisory/corporate finance services to help social sector organisations build the skills and capacity required to take on investment.
We seek both a social and a financial return from every investment we make. The balance of social and financial return will be different in each case and we will take into account the social and financial risk of each investment.
The minimum size of investment we make is £500,000. The maximum we will make initially is £15m.
Expression of Interest: firstly you will need to submit an Expression of Interest form providing information about your organisation, the type of investment you are looking for, how much and for what. Application: If we decide to take your proposal forward we will send you a full application form which will ask you for more information including a full business plan and financial model.
Due diligence: If your application is successful we will undertake a thorough due diligence on your proposal. This will include a visit to your offices, interviews with staff and board members, scenario testing of your financial model and a review of your social impact reporting
The minimum size of investment we make is £500,000. The maximum we will make initially is £15m.
Expression of Interest: firstly you will need to submit an Expression of Interest form providing information about your organisation, the type of investment you are looking for, how much and for what. Application: If we decide to take your proposal forward we will send you a full application form which will ask you for more information including a full business plan and financial model.
Due diligence: If your application is successful we will undertake a thorough due diligence on your proposal. This will include a visit to your offices, interviews with staff and board members, scenario testing of your financial model and a review of your social impact reporting.
We aim to let you know within two weeks of receiving your Expression of Interest form whether we would like to take your proposal forward.
Once we have all the information we need in your full application form, we will normally let you know whether we have decided to take your proposal forward to due diligence within two weeks. The due diligence process can take some time to complete, particularly if we are investing alongside other investors, but we will keep you informed at all times.
The Big Society Capital Investment Committee makes investment decisions for all investments up to £10m. The Investment Committee is chaired by the Chief Executive of BSC and includes the Chief Investment Officer, Chief Operating Officer, Chief Financial Officer, Director of Strategy and Market Development, and Senior Investment Analyst.
Investment decisions above £10m are made by the Board of Directors of Big Society Capital on the recommendation of the Investment Committee.
You can submit an Expression of Interest at any time.
You can submit Expressions of Interest for more than one proposal. We will assess each on its own merit. We will also consider whether you have the capacity to manage more than one investment.
We only invest in SIFIs. We don’t invest directly in frontline social sector organisations. This is because, by supporting SIFIs to grow, we can help them to make more connections between socially motivated investors and social sector organisations. This brings more capital into the social sector than BSC alone could provide and will increase long term impact.
It response to the Government’s consultation on the design a function of a social investment wholesaler (or ‘Big Society Bank’), the social sector was very clear that any such institution must act as a wholesaler and provide capital and support to the existing market to enable it to grow. It should not compete with or crowd out existing actors in the market. Investing directly in social sector organisations would put Big Society Capital in direct competition with existing social investment finance intermediaries which would distort rather than grow the social investment market.
Big Society Capital needs to be financially self-sufficient. This means that we must be able to cover our operating costs and make investments in line with our mission. This is important because growing the social investment market is a long-term project. So Big Society Capital needs to be around for many years and needs a business model that protects our long-term viability and independence. In practice this means that we will not make grants.