Big Society Capital has launched a new £10m match fund that encourages people to invest in charities and social enterprises.
The £10m Crowd Match Fund is a partnership between the social investment wholesaler and three crowdfunding platforms. It has been set up to connect social sector organisations that want to raise debt and equity finance with people who care about their causes.
The participating platforms – Crowdfunder, Ethex and ThinCats, through its Community Chest platform – will enable people to invest directly in charities and social enterprises that are eligible for social investment tax relief.
SITR enables individuals to claim income tax relief of 30 per cent of qualifying investments up to £1m a year in charities, community interest companies or community benefit societies.
BSC said the fund was the first of its kind to match different investments made by the public across the social sector.
\Ben Warren, investment associate at BSC, said: "We hope this initiative will help charities and social enterprises find new routes to investment that could offer better value and engagement from their local communities.
"We know that donation-based crowdfunding was the fastest-growing model of alternative finance in 2015, and we are excited about the potential for this fund to create similar momentum in the social investment sector."
Philip Hammond, the Chancellor of the Exchequer, recently announced an increase in the amount that charities and social enterprises less than seven years old can raise through SITR to £1.5m from April 2017.