Financing Civili Society

Over the last five years, the financing of civil society organisations in

the United Kingdom has become more sophisticated. In particular, the

social investment market which supplies capital to these organisations

has developed into a prototype market. However, as with any emerging

market, there is a lack of clarity among the participants about the

frameworks and parameters, even purpose, of the market place.

In recent months, Venturesome has seen a growing number of additional

voices calling for significant steps to be taken to build a strong social

investment market. This welcome advocacy appears, however, to be

accompanied by confusion regarding the different models of civil society

organisations, their social impact and expected financial returns1. Clarity is

needed. These organisational models have varying financial needs. A supply

of capital, comprising a range of financial instruments, is required across

this broad spectrum of demand.

Capital is of course no substitute for income, needed to match expenditure

on staff and other recurring costs. Capital has a complementary role in

building strong and effective civil society organisations.

1.2 Aim of this paper

As a practitioner in the social investment market with six years of deal

experience, Venturesome offers this paper as a way of providing clarity

in order to drive the development of the social investment market.

It captures our perspective on the organisational models looking for

financing solutions from social investors and on the current state of the

supply side of the social investment market.

Our vision is of a market, in which access to appropriate capital is no

longer a constraint to civil society organisations achieving their social

impact. Our emphasis is on the word ‘appropriate’ in the previous

sentence. We do not propose a torrent of money of any sort to flood

the market. This paper, our explanations and our proposals are intended

to work towards a market, which...