Charities and social enterprises can obtain finance in many ways – through donations, grants or contracts from local authorities, trading with businesses or the public, and by raising investment. In many cases, a charity or social enterprise will get the funds it needs without needing to consider raising investment, such as by way of shares or loans.

The choice to raise investment may be more appropriate for some organisations than others, and should be based primarily on the ability to satisfy the financial commitments made in any offer to investors. A regular, reliable income stream from an asset or trading activity will often be a key financial consideration.

This briefing focuses on the legal requirements that apply to charities and social enterprises when raising investment and communicating investment offers, and addresses the key questions that directors, trustees and senior employees should consider.