INVESTMENT finance has come of age as a prime source of funding for charities and social enterprises after the sector’s key player hailed a record year.
Social Investment Scotland’s (SIS) annual impact report, due to be published tomorrow, will show that its own customers have sustained more than 1,300 jobs over the past year and generated a collective turnover of almost £50 million.
During the 12 months to the end of March, SIS played a key role in making 55 new investments worth some £7.7m from its own investment pool and the Scottish Investment Fund, which it manages on behalf of the Scottish Government.
SIS, which is chaired by veteran Scots business figure Nick Kuenssberg, was established in 2001 to provide a new model of financing for third-sector organisations and enterprises. Since then it has invested in excess of £43m in almost 200 ventures. The body’s chief executive, Alastair Davis, said investment finance was “now seen as a recognisable business model” for those operating within the sector.
“Access to investment finance is key to unlocking the value of the social enterprise sector,” he said. “Not only are we seeing organisations sustain jobs, increase their turn-over and grow in capacity, they are becoming less dependent on grant funding as a result of investment. Taking on a loan can give an organisation control over its own destiny.”
The latest report paints an optimistic picture for the sector in 2015 with almost three-quarters of SIS’s customers forecasting an increase in turnover in the year ahead.
Meanwhile, the percentage of customers reporting no grant funding has grown from 12 per cent in 2012 to 30 per cent in 2014.
Duncan Thorp, policy and communications officer for campaign group Social Enterprise Scotland, said: “SIS is a major player in the ethical investment arena and within Scotland’s innovative social enterprise community. As social enterprise becomes the business model of choice, these powerful social impacts will bring even more positive benefits to our communities.”
SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING