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Holger Westphely

Acting Head of Venturesome

Charities Aid Foundation

Blended finance through our Development Fund

6 October 2021

Blended finance is a combination of grant and loan funding deployed as a single financing package

With thanks to our philanthropic funders, we are now able to continue to offer blended finance through our main fund, the Development Fund*. 

*(All eligible enquiries welcome but please note that earliest disbursal is likely to be early 2022)

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Blended finance will be available for high impact social organisations adapting their operating models following the pandemic and can be used for:

  • Capacity building
  • Business/service transformation
  • Launching new services
  • Strengthening social impact measurement systems and processes
  • Supporting financial resilience strategies (e.g. acquisition of a building where appropriate)

Grant funding will not be available for:

  • Organisations who can access bank finance or secured finance
  • Organisations that cannot demonstrate strong social impact
  • Refinancing of existing debt

How blended finance can help

It can be challenging for social organisations to access unrestricted grant funding to transform their business model, build infrastructure or just improve what they are already doing. A loan can form part of the solution but could be too expensive as the only source of finance to fund business transformation, especially when investment in capacity building is critical. As social organisations continue to face unprecedented demand and a cocktail of uncertainties following the pandemic, we can help them secure the finance they need to adapt to the new environment.

We know that for many social enterprises and charities, funding growth through a loan can not only be daunting it may simply not be affordable. Our investment officers work closely with organisations to plan carefully the level of debt being taken on, so it doesn’t jeopardise the financial viability of the organisation and they make sure the organisation can make monthly repayments even if they do not generate all their forecasted income.  We also support our borrowers throughout the life of the social investment, to help them manage their finances better and help them leverage additional funding where possible and appropriate.

A grant blend gives social organisations an opportunity to both strengthen their capacity and resilience, while securing the necessary investment to achieve their transformation and/or growth plans. We believe this is particularly important to strengthen the resilience of the sector, following an especially tough period for the entire social sector in 2020-21, and we hope this will give organisations the confidence to take on, possibly their first, social investment.

CAF Venturesome and blended finance

We are unique in the UK as we use philanthropic capital, money that has been set aside for charitable purposes only, to fund our social investments.  Our funders - individuals and their families, grant-making trusts and corporate foundations - have played a vital role in supporting the social investment sector.

With thanks to Power to Change, Access – the Foundation for Social Investment and private philanthropists we have been able to offer to offer blended finance across all our funds, the Development Fund, the Community Led Housing Fund and the SE-Assist Wales Fund, since 2019.

Although our early 2021 grant from Access has now been fully deployed, we are delighted to announce that thanks to the generosity of CAF’s private clients we can re-launch blended finance through our Development Fund in November 2021.

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Read Alternatives Activity Centre's story to see how blended finance helped fund a skills training centre for young people transitioning from Children’s to Adult services in Derby.

“This is going to be the beginning of an important and exciting journey for us and all of those who use our services now or in the future. We could not have got to this stage without the support of CAF Venturesome and as such will always be incredibly thankful for your help.”

Belinda Hadfield, Service Manager, Alternatives Activity Centre

Visit our Development Fund page here to find out more and register your interest

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