A tradable loan from a group of social investors to a charity or social enterprise over a fixed period of time with a fixed rate of interest. For example, if you issued a £2million bond over 5 years at 2% interest in 2017, you would pay the social investors £40,000 interest each year and repay the £2million in 2022.
When might I use it?
If you are a relatively large charity or social enterprise needing unrestricted funds to scale up your activities or develop a new line of business.
Where can I get it from?
Charity bonds are typically issued with the support of specialist intermediaries. The investment may come from institutional investors, high net worth individuals or retail investors.
Browse our investors and advisors page to view organisations providing support on charity bonds.
Pros
-
Source of large scale unsecured finance with fewer restrictions than bank finance
-
Opportunity to publicise your charity or social enterprise and involve supporters as investors
Cons
-
May be expensive to set up
-
Not suitable for high-risk investments into small organisations
More information
-
Know How Non-Profit - Charitable Bonds
-
Example case study - Golden Lane Housing