Small Charities and Social Investment

This report takes a close look at the ‘social investment journey’ of 25 small charities, providing in-depth insights into their motivation, experience of the process, challenges encountered, the support they received and factors that might improve the journey.

While there are some very positive experiences of moving through the investment process, many of these organisations were stretched, busy, service delivery charities handling social investment ‘off the side of the desk’ with little or no prior knowledge and experience. In many cases the experience was unfamiliar, opaque and confusing, made difficult not just by inexperience but by the information and support provided by lenders. The findings help to identify what is important to small organisations and lead to suggestions on actions which could be taken to improve the journey.

The report highlights opportunities to develop blended finance products. It also focuses on the need for charities to explain their assets and strengths during the application process rather than focusing on deficits and gaps. Lenders interested in supporting charities to deliver on their mission need to be willing to see charity survival as a legitimate form of social impact.

IVAR proposes that ‘the aim of all social investments should be to leave an organisation in a stronger position, not only financially but also in relation to its ability to pursue its mission’, and identifies a number of clear ways in which lenders can strengthen their practice.

Click here for the full report