Funding community investment

Sources of funding for community investment work

Many organisations will be seeking investment partners, funding, or partnership opportunities to help establish or continue community investment programmes. There are a number of options in this area, which we have outlined below:

Peer to peer lending might be a possibility for social enterprise start-ups at Zopa

Space hive is a funding platform for public space projects, and can help fund community projects.

Big Society Capital is an independent institution with £600m to develop the social investment market and invest in intermediaries. It has a good relationship with the Community Land Trust network and is already establishing an intermediary fund with members of the network to help fund work around empty homes. This work will involve housing associations although they cannot invest in them directly, only through intermediaries. Their market statement included a call for investment ideas in affordable housing, including community led development.

Nesta runs a £17.6 million Impact Investment Fund. This fund is available for organisations whose projects aim to improve the health of older people, help young people to achieve a good education or to promote the social and environmental sustainability of communities.

Nesta is offering medium term equity, quasi-equity and debt investment of between £150k and £1m for organisations with strong management teams, a strong business model which is scaleable, and has innovation and technology at the core of the solution.

Big Lottery fund has a number of funding streams which may be suitable for Housing associations or partner community groups to apply for, which mostly focus around improving social outcomes.

Charitable, philanthropic organisations and private funders may be able to offer you support. The Association of Charitable Foundations will be able to direct you.

The Prince's Trust has a great resource for signposting community funders focusing on young people.

Top tip: Have your social impact pinned down before approaching funders. The Public Services Act page outlines the standards expected by public sector procurers.

These are not exhaustive avenues for funding opportunities. With an emphasis on measuring the social value of your activities, you may find that your own resources can be more focussed and deliver greater impact.

You may also find that a partnership approach is a good way to deliver social impact for your organisation. We have detailed existing initiatives that may be of interest in the Partnerships section.

One option is to look for social investment. The Cabinet Office is willing to play a number of roles in the social investment market, including:

  • Providing funding for social start-ups from the £10 million ‘Social Incubator Fund’. The Cabinet Office also has a £10 million ‘Contract Readiness Fund’ to prepare more established social ventures to take on investment.
  • Looking at the tax and regulatory environment needed to make social investment appealing to charitable foundations and the public as financiers.
  • Acting as an intermediary between social ventures and investors.
  • Promoting the Social Value Act and removing the barriers to social organisations accessing commercial market opportunities.
  • Providing guidance around structuring social impact bonds (SIBs).
  • Providing a ‘top up contribution’ to SIB contracts.