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£30 million investment fund
18/06/2008
A £30 million Scottish Investment Fund has been launched to help enterprising Third Sector organisations become more effective and efficient.
The details of this project have been taken forward in partnership with Green MSPs - as part of the informal agreement between the party and the Government following last year's election.
The fund opens on September 1, 2008 and will provide support to established Third Sector organisations with the potential to grow their turnover or become financially sustainable.
Speaking ahead of the Scottish Council for Voluntary Organisations (SCVO)'s Gathering in Glasgow, Finance Secretary John Swinney said:
"The Scottish Government's over-arching purpose is to create a more successful country, with opportunities for all of Scotland to flourish through increasing sustainable economic growth.
"An enterprising Third Sector has a pivotal role to play in achieving this goal which is why we have increased funding for the sector by 37 per cent.
"The Third Sector is often best placed to connect with individuals the public sector finds hardest to reach, and to bring employment opportunities, and income to individuals where the private sector doesn't operate.
"The new Scottish Investment Fund will help established Third Sector organisations extend their services to more people and become more enterprising and sustainable organisations.
"It will be targeted at organisations that can make a key contribution to delivering the Scottish Government's strategic objectives of creating a wealthier and fairer, healthier, safer and stronger, smarter and greener Scotland.
"In the first year of the Fund I am particularly keen to see the Fund invest in organisations that address issues of employability, environmental action and tackle the underlying causes of health inequality"
"We have allocated £30 million over three years to this Fund which, we see as a long-term vehicle for investing in the Third Sector.
"This Scottish Investment Fund, combined with the Enterprising Third Sector Action Plan, will build on the ambitions of enterprising Scots and ensure that more people benefit from an increasingly successful economy."
Green MSPs have worked closely with ministers on developing the policy. Patrick Harvie said:
"Scotland's social enterprises are an essential part of the fabric of our society, combining traditional Scottish values of social cohesion and the tools of entrepreneurship with often radical visions of sustainability. The sector is growing in strength and confidence, and we are therefore pleased to be working with Scottish Ministers to deliver the Scottish Investment Fund, which will look at innovative ways to support social enterprise and social firms still further."
The Scottish Investment Fund will be targeted at established Third Sector organisations which are:
- Located and trading in Scotland, with an appropriate legal constitution in place ,and reinvest surpluses for a social purpose
- Have been trading successfully, partly through income generation, for at least three years. In the case of new joint venture or consortium arrangements at least one of the partners must have been trading successfully for at least three years
- Have established, successful experience in public service delivery or trading in other markets
- Have potential to grow their turnover and/or become financially sustainable
- Are investment-ready in terms of management, governance and financial position or in a position to become investment-ready with business support
Organisations not eligible will include those with no track record of generating income other than grants; support, intermediary or infrastructure functions and those where the beneficiaries live outside Scotland. Proposals that relate to the running costs of services and projects and proposals that could normally be funded by commercial loan finance or other funding sources will not be eligible.
The Scottish Investment Fund will include loans and strategic investments based on social outcomes. Social Investment Scotland (SIS) will be the fund manager and decisions on funding will be taken by the Scottish Government, SIS and representatives from the banking and finance industry.
Funding for organisations at an earlier stage of development will be available through the Third Sector Enterprise Fund, which will support organisations that want to build their capacity to operate in an enterprising way. Further details of this £12 million fund will be provided in the months ahead. A total of £2.7 million will be invested in 2008/09, with £5 million in 2009/10 and £4.3 million in 2010/11. The Scottish Government will offer funding of up to £100,000 to Third Sector organisations based on an assessment of business plans and social outcomes.
The Scottish Government's wider support for the Third Sector will also support the Scottish Investment Fund and the Third Sector Enterprise Fund. This will include strategic work on partnerships and relationship management with Government, as well as areas covered by the action plan including skills and learning, procurement and service commissioning, new ways of investing in the Third Sector and local Third Sector infrastructure.