Investment Criteria

Investment Criteria

SIF will make strategic investments in individual organisations seeking support to achieve a step-change in their operational capacity, capabilities and financial sustainability.

The principal eligibility criteria relate firstly to the outcomes for Scotland being realised by the investment but also reflect the fact that SIF will focus on specific organisational characteristics to achieve its investment targets.

Investment outcomes

Over the life of the fund, the financial and social returns generated by SIF investments will be measured in terms of how they contribute to the achievement of one or more of the 15 National Outcomes which describe what the Scottish Government wants to achieve over the next ten years:-

We live in a Scotland that is the most attractive place for doing business in Europe;
We realise our full economic potential with more and better employment opportunities for our people;
We are better educated, more skilled and more successful, renowned for our research and innovation;
Our young people are successful learners, confident individuals, effective contributors and responsible citizens;
Our children have the best start in life and are ready to succeed;
We live longer, healthier lives;
We have tackled the significant inequalities in Scottish society;
We have improved the life chances for children, young people and families at risk;
We live our lives safe from crime, disorder and danger;
We live in well-designed, sustainable places where we are able to access the amenities and services we need;
We have strong, resilient and supportive communities where people take responsibility for their own actions and how they affect others;
we value and enjoy our built and natural environment and protect it and enhance it for future generations;
We take pride in a strong, fair and inclusive national identity;
We reduce the local and global environmental impact of our consumption and production; and
Our public services are high quality, continually improving, efficient and responsive to local people’s needs.
Organisational characteristics

The fund will only invest in established, ‘investment-ready’ social economy organisations, located and trading in Scotland, with social aims including those related to equality and diversity, which re-invest any surpluses for a social purpose.   Other characteristics of potential investment targets include:

a history of successful operations, including generating income other than grants, for at least three years;
an established track record of successful service delivery in either the public or private sectors;
a robust business plan including a minimum of three years’ financial projections; and
the ability to demonstrate strong historic and projected social returns.

The fund will invest in organisations that fit the above profile with the aim of achieving a step change in their capacity, capabilities and financial sustainability.   Certain organisations and or activities will not be considered for investment. 

SIF investment may be applied in areas such as operations, marketing and business development, governance and financial controls.  The fund will also enable organisations to invest in assets such as buildings, plant and machinery.    The terms on which investments will be completed will vary according to the requirements of individual cases, but all SIF investment packages will include an element of repayable funding.

Investment Priorities

2008/09 investment priorities will focus on organisations with social missions that address issues of:-

Environmental action; and
The underlying causes of health inequality

Areas identified as priorities for investment will be subject to regular and frequent review to ensure SIF achieves an appropriately balanced portfolio and it is likely that other priorities will emerge as the fund develops.

Outcome targets will be agreed at the outset, as part of the assessment process, for all investments and monitored to ensure that they are delivered.