​Get to the bottom of social investment readiness in 60 seconds

By May 04, 2015

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Azlina Bulmer, programmes & development manager at Charity Bank whizzes through social investment readiness and the new funding opportunities it could create for charities and social enterprises.

Define social investment in a sentence

Social investment is finance provided to voluntary, community and social enterprise (VCSE) organisations which investors expect to be returned, and that is designed to have a social value.

What does investment readiness mean in the context of the social sector?

Investment-readiness, or becoming investment-ready, is making your organisation capable of taking on social investment or a loan. An investment ready organisation will have the skills required to identify, apply for and secure investment or loans.

Becoming investment ready involves charities and social enterprises consolidating and professionalising business practices, governance structures and management teams to attract the right sort of investment. It means carrying out thorough financial modelling and detailed market research in order to produce credible business plans that will stand up to investor scrutiny.

So what sort of skills are required to become ‘investment ready’?

Some of the skills that would make an organisation ready for investment or a loan include:

  • strong leadership
  • business planning
  • good finances
  • fit for purpose governance
  • adequate policies and procedures

Will this require a lot of work for charities and social enterprises?

Possibly, in some cases. But the skills required for investment readiness will also make your organisation more resilient and sustainable. Whether or not you choose to take on investment after you have become investment-ready may be irrelevant. What matters is that you have the choice and new capabilities to make an informed decision about the best financing options. There is absolutely no time wasted in giving yourself the skills to decide how you are funded without being dictated to!

How do I get started?

Bear in mind that each organisation has different requirements and will need different levels of support – there is no one size fits all option. For many, investment readiness is a relatively new concept and many organisations will require some support in adopting the practices mentioned above.

I would suggest your first port of call is the Big Potential programme run by the Social Investment Business in partnership with Charity Bank and aimed at supporting charitable organisations to access social investment. Find out more here.

Other organisations you may want to approach:

  • Social Enterprise UK is a national membership organisation for social enterprises.
  • Locality, a network of over 500 organisations, helps communities to establish locally owned or managed organisations.
  • University of Northampton, in association with a number of partners, that include Big Lottery, provides business investment and mentoring support opportunities to charities and social enterprises in Northamptonshire.