Lead Partner: Wessex Re-investment Trust
Description
Wessex is investigating new ways of attracting finance for social enterprises in the South West of England. Grants have been a traditional means of funding for many of these organisations, and, whilst still applicable in some cases, they do not always provide the required funding and are becoming outdated.
As an action research project, Wessex has received funding from the Esmée Fairbairn Foundation and Friends Provident to develop a mechanism for raising finance from investors. Investors may well be local people who care for the future of their community. Investors are likely to be those individuals or businesses interested in supporting local community initiatives which have a target of achieving long term sustainability. This implies that the initiative must have a sound plan of surplus income generation.
Their investment could be in the form of equity investment, loans or bonds. The return to the investor could be in the form of a financial return, a social return, or a combination of the two. (We know that one community owned pub offers dividends in the form of pints!). There may be an additional return for tax payers by receiving tax relief on their investment if it is over £500.
Enterprises which are likely to benefit from this type of financial support could be in the food sector, for instance growing, distributing or promoting local food; environment, such as renewable energy or recycling programmes; affordable housing; or community asset acquisition and/or development.
In this action research phase (which will be completed at the end of March 2007) Wessex will work alongside interested organisations to finalise a robust proposition which will form the grounding for a prospectus. The prospectus will be actively marketed and the received investments can be managed by the enterprise or by Wessex on its behalf. Once tested and proven, Wessex will be able to offer this as an affordable service to other enterprises to raise finance. It will also form the basis of a national model for others to adopt.
Using the appropriate legal structure for the enterprise, Wessex has developed a model which is approved by both the Financial Services Authority (FSA) and Her Majesty's Revenue and Customs (HMRC) for Enterprise Investment Scheme tax relief. The organisation is now in the process of testing the effectiveness of this work with selected social enterprises. Once the pilot stage has been completed, Wessex will be able to help organisations to raise finance using this way.
Contact Details
The Threshing BarnWoodhayes
Luppitt
Honiton
Devon
EX14 4TP Telephone: 01404 549139 Fax: 01404 549658 e-mail: enquiries@wessexrt.co.uk
Website: http://www.wessexrt.co.uk