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| Minister for Civil Society Nick Hurd talks Big Society Capital: the new social investment organisation designed to ‘develop a third pillar of funding to sit alongside donations and money from the State’. The Minister also responds to the furore over caps on tax reliefs for charitable donations announced in the Budget. |
Parliamentary recess was a game of two halves for the Charities Minister! In the first half, we launched Big Society Capital to a chorus of approval from most but not all. In the second half we got the backlash to the Budget and the proposal to introduce a cap on tax reliefs.
Of course not everyone thinks that the sector needs Big Society Capital and indeed I have heard this view not so quietly expressed from sources close to DSC. I see it very simply. This is about making it easier for effective charities and social enterprises to access capital and so expand their services.
For years the sector has been telling Government that it is too hard getting affordable; long term capital from mainstream banks. So within two years, we have created a new institution that has not cost the taxpayer anything but which will have £600 m to invest through intermediaries. The mission is to grow the embryonic market of social investment and prove to foundations, pension funds and savers that you can invest to support a social cause you care about and have a good chance of getting your money back (so you can do more). Prove this and we can really develop a third pillar of funding to sit alongside donations and money from the State.
This is not just about loans; it’s about encouraging creative structuring of more opportunities for social investors to come in and share risk and success whether it be social impact bonds or quasi equity. This is not free money; but it is money motivated by social impact. It is not a short term substitute for lost grants - it is a long term intervention to help the sector respond to new opportunities; whether these are the chance to deliver public services or take over a community asset. We know that many organisations will need help getting investment ready and that's why we have put in place a new £10m fund that will offer grants to help front line organisations get the help they need. For more info on it all, www.bigsocietycapital.com, is a good place to start.
This complements our desire to encourage more giving. Of course the Budget has generated concerns that rich people will give less away. However the Prime Minister has made it clear that we are very serious about making sure that this does not have a big impact on charities that rely on large donations. I will continue to represent the view of "the sector" in all its diversity and am particularly keen to hear your opinions so that I can feed them in. Few will disagree with the principle that everyone should pay tax so this is about getting a balance right and we have some time to sort this out. But the Giving agenda is broader than tax reliefs for avery small group of people.
The challenge surely is how we make it easier and more compelling for a much broader section of society to contribute money, time and talent. This is the issue I will return to in my next Word from Hurd. Feedback as ever always welcome (braced)!
f you have strong views on this please feel free to contact me on psnickhurd@cabinet-office.gsi.gov.uk It will get through to me!