Big Society Bank launched
Big Lottery Fund
The vision for a Big Society came much closer last week as the Big Society Bank – now officially named Big Society Capital – became a reality with the establishment of two expert boards. In addition the first investment from dormant accounts has gone to the Private Equity Foundation, an organisation whose mission it is to support disadvantaged young people into employment, education or training.
Sir Ronald Cohen, renowned pioneer of venture capital, has agreed to serve as the unpaid, interim Chair of Big Society Capital Limited, the operating company of the group, until it is fully operational and its Board has conducted a search for a more permanent Chair. Nick O’Donohoe, formerly Global Head of Research at JP Morgan, will take the helm as Big Society Capital’s first CEO. An experienced board will be working with them to lead this truly groundbreaking initiative as it transforms the world of social finance for charities and social enterprises:
Sir Ronald Cohen, Chair (the Portland Trust and Bridges Ventures)
Nick O’ Donohoe, CEO (formerly JP Morgan)
Dawn Austwick (Esmee Fairbairn Foundation)
David Carrington (Independent Consultant)
John Kingston (Association of Charitable Foundations)
Geoff Mulgan (National Endowment for Science Technology and the Arts)
Dai Powell (HCT Group)
Lady Susan Rice (Lloyds Banking Group)
Danielle Walker Palmour (Friends Provident Foundation)
The Board of the Big Society Trust, responsible for ensuring the group stays true to its mission, has also been appointed. Members represent a wide spread of leaders in the social and financial sectors:
Sir Richard Lambert (University of Warwick)
Ian Davis (formerly McKinsey & Co)
Baroness Pitkeathley (House of Lords)
David Robinson (Community Links)
Sir Stephen Bubb (CEO of ACEVO) ex officio in rotation every three years with NCVO
Peter Holbrook (CEO of Social Enterprise Coalition) ex officio
Gareth Davies (Cabinet Office) ex officio
Sir Ronald Cohen (Chair of BSC) ex officio
Big Society Capital will be run independently from government with decisions around funding being made by an impartial investment committee. It will play a critical role in speeding up the growth of the social investment market. Socially orientated financial organisations will have greater access to affordable capital, using an estimated £400million in unclaimed assets left dormant in bank accounts for over 15 years and £200million from the UK’s largest high street banks.
Big Society Capital and the four Merlin banks have also come to an agreement on heads of terms for the banks’ £200m investment in the company.
Minister for the Cabinet Office, Francis Maude, said:
“There are few moments like this when something happens that can really change the world. We’ve all heard about a small charity or social enterprise sweeping away entrenched local social problems. But we have never seen a significant commitment to help social innovations grow and be implemented on the national stage until now. Big Society Capital will undoubtedly change this and unlock the money that charities and social enterprises need to grow when a big opportunity comes along. This government is proud to support this achievement. I want to thank Sir Ronald Cohen and Nick O’Donohoe and everyone else, including the banks, who have made this a reality so quickly”.
Sir Ronald Cohen, Big Society Capital, Non-Executive Chair commented:
“Today’s launch of Big Society Capital Group marks the culmination of ten years of thought and effort by many individuals and organisations. It is the first of a new kind of organisation devoted to providing finance in the interest of society. The depth and breadth of The Big Society Trust and Big Society Capital boards, combined with an anticipated £600m in initial funding will enable BSC to attract additional capital to the social sector from charitable foundations, institutional investors, companies and private individuals.
“Innovations such as social impact bonds and a burgeoning array of organisations operating across the social sector suggest that we are on the cusp of a revolution. The social sector now has the prospect of attracting funding in the UK to support social entrepreneurs, much as venture capital and private equity did to support business some three decades ago.We very much welcome the equity investment by the Merlin banks and a strategic relationship with them in developing the market for social investment in Britain."
This is just one of the many efforts that government is leading to build the UK’s social investment market. We will say more about innovative products coming to fruition, such as Social Impact Bonds, in the next few weeks.
To support the early development of Big Society Capital, the Big Lottery Fund has set up an Investment Committee to make some initial investments. Its first investment is an in principle award of up to £1m to the Private Equity Foundation.
John Kingston, Director of CAF Venturesome and chair of the Investment Committee said: “The Investment Committee’s call for proposals has generated a high level of interest, with 40 proposals in so far. The Committee met on Tuesday and I am very pleased to say has agreed in principle to make its first investment: up to £1m in a social investment fund run by the Private Equity Foundation to help disadvantaged young people into employment, education or training.”
Applications for investment should be initially made to the Investment Committee, details of the fund and application process can be found on the Big Fund website www.biglotteryfund.org.uk.