It's important to understand whether social investment is right for your organisation, and find out about the advice and support available to you.
Advice and support
Not all charities and social enterprises can or should be trading organisations, and not all trading organisations need to take on this sort of finance – some may never need it. It also doesn’t mean that you can only either go for social investment or grants: many organisations seek to blend the two.
It’s always useful to have money in the bank. But that doesn’t mean that taking money or investment from other people is always the right move for your organisation. Investment comes with a cost and you have to decide whether the potential benefits outweigh the costs.
It could be that the best way forward for your organisation is to build up money in the bank gradually by selling products or services to customers at a profit, rather than looking to raise a lump sum from an investor.
For example, a charity which has set up a new enterprise employing a small number of the clients it supports may establish the business gradually and make a small profit each year. This can be reinvested to grow organically and employ more people year-on-year.
On the other hand, an organisation setting up a shop or creating a new product may find it far more difficult to open for business if it doesn’t have money up-front to pay for the equipment or to buy the initial stock needed to get started.
The key point here is that you need to be clear about what taking on investment will enable you to do that you cannot do already.
Content provided by the Social Investment Explained guide.