What is social investment?

Social investment is the use of repayable finance to help an organisation achieve a social purpose. Donors can maximise their social impact, whilst accepting a partial financial return*. We lend to charities and social enterprises from money donated by individuals, businesses and other charitable foundations.

As they repay us, we use the same money to lend to other organisations looking for affordable, flexible finance. This means that one pot of money can benefit many causes, multiplying the impact of those funds.

*Due to the high-risk nature of the loans we make, we estimate that we will return 85-90% of capital to our funders in six years.
“Back in 2002 CAF came up with the novel idea that you could lend money to charities on a considered basis in a portfolio. Rather than giving a pound away once, you could multiply your giving and make that pound work five, six, seven, eight times.

“I became an early funder of a pool of loans that CAF would make and continue to support their innovative way of achieving my philanthropic goals.”

 
Sir Harvey McGrath, philanthropist, former Chair of Big Society Capital and supporter since 2004

What is a social enterprise?


Social enterprises are businesses that trade for a social or environmental purpose. They prioritise people and planet, using the the majority of any profit made to further their mission.

According to Social Enterprise UK's State of Social Enterprise Survey 2023, social enterprises achieve more positive financial outcomes compared to other forms of business, while outperforming on social and environmental impact.

Yet persistent barriers are preventing the social enterprise model from expanding. These include inadequate access to finance and grant funding, skills shortages and poor economic conditions. Just under half (48%) of social enterprises reported making a profit in the last financial year, while 26% reported making a loss.

The Venturesome Impact Fund

Our social investment fund supports organisations all over the UK, irrespective of cause area or geography. This is in line with our mission to support a fair and sustainable future for all. 

We have launched the fund with £10 million of philanthropic capital and we’re aiming to increase the size of the fund to £20 million, thanks to our generous clients.

You can contribute to the fund and maximise the social impact of your giving through:
 

Social investment loan from your CAF Charitable Trust (repayable in 6 or 12 years):

  • Minimum £20,000 
  • Maximum £2,000,000
Management fees apply.

Social investment grant from your CAF Charitable Trust or CAF Charity Account (non-repayable):

  • Minimum £1,000
  • No maximum

Grant administration charge.

 
Please contact your client manager to arrange a contribution.

How social investment helps charities and social enterprises

Affordable, flexible repayment finance

To ease cashflow, develop new services, and build capacity.

No restrictions

Grant funding usually restricts how organisations use the funds. Social investment doesn’t.
 

Borrowing without putting assets at risk

Most banks look to secure large loans on assets like property. We don’t.


Repayments help other social organisations

We recycle the money that’s repaid, lending it to other organisations who need our support.


Diversifies income

Organisations can become more resilient and do more good for more people.
 

Strengthen operations

Getting ready for social investment can bring more discipline, rigour and transparency to a charity.
 


“CAF's social investment support has been pivotal to our sustainability and success in making a huge difference to the most isolated communities in Birmingham. Because of CAF, we have been able to make a difference to over 40,000 individuals." 

Ray Goodwin, Chief Executive, Spitfire Advice and Support Services
Female youth worker speaking to a teenage girl

What we look for in applicants

  • Trading for a minimum of one year
  • The scale and depth of impact to people or the environment
  • Evidence that funding will make a difference in the community
  • How social investment could help an organisation become more sustainable, create jobs and opportunities
  • Evidence that an organisation has strong governance, appropriate legal structure and a sustainable business model to repay the loan

An experienced lender

CAF was one of the first to launch a social investment fund in the UK. Since 2002:

730+
social investments have been made

£65m
has been lent or granted to social organisations

500+
social organisations have benefited from our funds

100+
donors have funded our loans

Help us provide social investment to organisations with a purpose

Speak to your client manager to arrange a loan for up to 12 years or a grant from your CAF account.