Charitable bond issuer Citylife plans to rebrand as Allia and develop a new pooled fund bond mechanism for charities to raise money.

Since 1999 Citylife has issued a number of bonds focused on specific places in the UK, raising funds for local projects tackling unemployment and disadvantage.

The charitable bond works by pooling money from individual and corporate investors. Part of this money is loaned to an AA rated non-profit social business while the rest, after deduction of costs, goes straight to charity. After five years, the social business repays the loan plus tax-free interest, which is exactly the right amount to repay the investors.

In the last few years however it has been exploring how it can use its charitable bond mechanism to support a wider range of causes.

As a result it has decided to rebrand as Allia, the social profit society, and launch a new fundraising service.

The service will work by making a single offer of bonds on behalf of multiple charities. The mechanism is exactly the same, but investors can choose which charity they want to support and whether they want a return on their investment. This makes the model both scalable and accessible to even the smallest charities. Allia will offer a new round of bonds every four months, providing the charities with an ongoing fundraising tool to access a whole new income stream.

The new brand will be adopted later this month and the first pilot round of bonds with a selection of charities will open for investment in early December. Other charities will then be able to apply to be included in the following round starting next April.