LONDON, December 7, 2016 /PRNewswire/ --
Three of the fastest growing crowdfunding platforms in the UK will partner with Big Society Capital as part of a unique £10 million Crowd Match Fund to allow the public to invest directly in charities and social enterprises. Crowdfunder, Ethex and ThinCats (through Community Chest) will help connect people with the causes they really care about by listing social sector organisations who want to raise debt and equity finance.
The £10 million fund will see Big Society Capital match crowdfunded investments made by individuals into Social Investment Tax Relief (SITR) eligible charities and social enterprises. It will be the first of its kind to match different investments made by the public across the social sector. Private investors will qualify for SITR, which offers a 30% tax break.
The amount that younger charities and social enterprises can raise through SITR will increase to £1.5 million from April 2017.
Ben Warren, Investment Associate at Big Society Capital, said:
"This fund marks a totally new approach for social investment and crowdfunding. By bringing together the experience and knowledge of these three partners we want to open up opportunities for the public to invest in a huge variety of causes they feel passionate about.
"We hope that this initiative will help charities and social enterprises to find new routes to investment which could offer better value and engagement from their local community. Donation-based crowdfunding was the fastest growing model of alternative finance in 2015, and we are excited about the potential for this fund to create similar momentum in the social investment sector."
Recent Nesta research shows that the UK alternative finance sector grew by 84% in 2015, with £3.2 billion in investments, loans and donations.
Matt Fountain, who raised investment through SITR for his social enterprise Freedom Bakery, said:
"I think we will see a fast increase in the number of deals being made through crowdfunding platforms and the fund is going to be a very powerful tool for communities and social enterprises to raise investment. The magic of crowdfunding in this way is that it will not only bring in much needed investment but will bring the public far closer to the causes they seek to support."
SOURCE Big Society Capital