Scope pilots £20 million bond programme as new income source
Howard Lake | 31 October 2011 | News
Disability charity Scope is to pilot a £20 million bond programme to generate a new source of funds. The Scope Bond Programme is designed to generate social benefits in addition to the expected financial returns to investors. The charity plans to use the income to invest in expanding its existing fundraising programmes and its network of charity shops. These will provide the returns to investors.
Scope, which has a history of piloting innovative financial products, is partnering with FSA regulated ethical investment company Investing for Good, to launch the bond programme. Scope has previously established a venture philanthropy programme for its Grangewood residential care home, which won a National Fundraising Award for most innovative fundraising campaign in July this year.
The programme will work in the same way as similar corporate bond products: Scope will be able to issue sterling bond tranches at varying nominal amounts, maturity dates and coupon rates under the programme. Listed on the Euro MTF market in Luxembourg, the programme “will be subject to the same regulation and protection offered to corporate bond investors”.
Scope and Investing for Good expect that the bond programme will appeal to trusts, foundations, high net worth individuals and wealth managers who are looking for social investment opportunities for their capital. Scope has already received a pledge in principle towards its first issue under Investing for Good’s Charity Bond Programme[iii] from the Big Society Finance Fund[iv].
The development of the bond programme has been aided by pro bono support from various City partners including BNY Mellon, acting as fiscal agent and registrar, Capita acting as nominee holder, Linklaters offering legal expertise, and from Weil, Gotshal and Manges.
The announcement of the bond follows last week’s report from the Charity Commission as part of CC14, which recognises that ‘mixed motive investments’ “could be an appropriate way for some charities to respond to the changing environment in which they work”.
Investing for Good reports that it is already speaking to several other charities about establishing similar charity bond programmes.
Geoff Burnand, Co-founder and Chief Executive of Investing for Good said: “Until now, investors who want their money to do social or environmental good have found themselves in a difficult position. For the most part, they have had to choose between investments that are essentially philanthropy – offering little or no financial return – and those that are high return, but also high risk. The Charity Bond programme has been designed to strike a balance and also to satisfy both the ethical and financial aspects of social investment.'”
Richard Hawkes, Chief Executive Scope described the bond as “a landmark development for Scope [which] could revolutionise the way we and other large charities raise finance for our work in the future.”
www.investingforgood.co.uk
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.