Charity Bonds | Big Society Capital
Charity
bonds

Charity Bonds are growing in popularity and so far £87.3 million has been raised by charities and social enterprises through 15 transactions.

Charity Bonds offer charities and social enterprises a new way to engage with a wide variety of social investors including individuals, foundations and institutions. Charities and social enterprises can then invest the funds raised in activities that will generate additional social impact and support their scale and long-term sustainability, as well as repaying the original investors.

What is a charity bond?

A Charity Bond is a tradable loan between a charity or social enterprise and a group of social investors. It will typically offer investors a fixed rate of interest. In return the charity borrows the investor’s money for a fixed period of time. The charities issuing the bond also commit to report on the social impact created through their work to investors.

Charities might consider using a Charity Bond as they are typically unsecured and may have fewer restrictions or covenants on the organisation's activities than banking facilities. They can also be a way to raise public awareness of the charity’s work and engage new supporters from different socio-economic groups.

For investors wishing to incorporate their social or ethical goals within their investment portfolios, Charity Bonds are often a preferred method for investment because they are simple, transparent and recognisable.

The Growth of the charity bond market

Social Investment Insights Paper

Research | 30 July 2014

This paper highlights the exciting developments in the charity bond market and draws out the opportunities to grow this market even further.

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Big Society Capital and the Charity Bond Market

Investing for Good and Scope

£875,000 secured loan facility to enable Investing for Good to underwrite Scope’s inaugural £2 million 3-year Charity Bond

Charity Bond Support Fund

£30 million Charity Bond Support Fund managed by Rathbones that invests between 15% & 1/3rd of the notional of eligible charity bond issues

UK Social Bond Fund

£10 million cornerstone investment into the Threadneedle UK Social Bond Fund, an ethical bond fund established for retail investors

Retail Charity Bonds

Supporter of RCB plc, a bond issuance platform structured to lower the expense and complexity of issuing listed, ISA-eligible, retail denominated Charity Bonds

Video Case Study: Glasgow Together

Partner with us

Talk to me about: Charity bonds, Social Impact Bonds and the role of social investment in education