Social Finance is an alternative model of investment, which differs from conventional models in one key respect: it demands that investments produce both a social and a financial return. In other words, there must be a tangible social benefit for any community in which the enterprise is based: this could be improved child care services, creating jobs in disadvantaged areas, providing transport for people living with disabilities etc.
Social Finance delivers resources to communities and enterprises overlooked by conventional outlets and ensures that all investments produce a social gain or benefit. All funding recipients are assessed first on their capacity to deliver meaningful benefit to either the people or the community they serve and then on their ability to repay the loans.
The importance of Social Finance has become even more pertinent in light of the economic crisis resulting from the turmoil in global and domestic financial markets. Needs have increased, but funding has been cut and charitable giving declined. Social Finance is assisting the social entrepreneurial endeavours of many NGO’s, non-profits and community & voluntary organisations who are now exploring new and innovative ways of generating funds in order to continue to address deeply entrenched social inequalities.