Big Society Capital releases criteria for investments into for-profits

Finance | Vibeka Mair | 18 Sep 2012

Big Society Capital has set out guidelines for investments which will be made into for-profit companies through intermediaries it supports.

In a blog, written by Big Society Capital (BSC) chief executive Nick O’Donohoe, he says while BSC will seek to ensure that the majority of investments made by intermediaries it supports will go to regulated social sector organisations such as charities, it will permit some of the vehicles it invests in to provide funding to for-profit companies which create significant social value.

For-profit organisations which gain funding through Big Society Capital channels must meet the following criteria:

The objects of the company set out that it is primarily concerned with providing benefit to society;
The company ensures that any surpluses are principally used to achieve social objectives and payments to shareholders are capped;
There is a constitutional or contractual lock on its Social Objects, dividend policy and an “asset-lock”;
Remuneration levels reflect social sector organisation norms and are disclosed in line with the accounting requirements for charities;
In the event of a change of ownership, it will take steps to preserve the mission as that of a social sector organisation.

These criteria are explained in more detail in a governance agreement on its website.

Directory: Big Society Capital

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