UK's first social investment tax relief deal struck in South West
Food waste charity FareShare South West has received £70,000 from a small group of angel investors piloting a social investment tax relief (SITR) fund in Bristol.
The fund is to be set up and managed by impact investment company Resonance. With an initial investment pot of £200,000, the pilot aims to provide a vehicle to channel Bristol’s wealth into the growth of social enterprises that are successfully tackling social and economic deprivation.
Daniel Brewer, managing director at Resonance, said: “There was a strong preference for investing in a pooled social investment fund, rather than directly investing in social enterprises on a deal by deal basis.
“This supports a strategic approach to social impact, ensuring diversification of risk across a portfolio and reducing the costs of deal structuring for individual projects.”
The social investment tax relief was introduced in the 2014 Finance Bill and came into effect in April this year. 30% of investments from individuals who invest their money in social organisations will then be given back to those individuals as a reduction in their income tax bill for that year. The aim of the tax relief is to reduce the risk of investing and to make social investment more appealing.
The first organisation to take advantage of a SITR fund, FareShare South West, is working to reduce the 400,000 tonnes of food that goes to waste in the UK each year by diverting food that would normally go to waste, to charities and social enterprises. It is one of 20 FareShare regional centres that each operate as independent social enterprises across the UK.
FareShare South West has developed a catering arm which uses surplus food to provide fine dining at festivals, conferences and a variety of other events. Through this trading arm, FareShare South West also offers work experience and job opportunities for vulnerable people often excluded from the jobs market.
Jacqui Reeves, chief executive of FareShare South West, said: “We needed investment to scale up our activities and to achieve our aims of addressing the imbalance by redistributing quality surplus food to groups working with vulnerable individuals in and around Bristol.
“The investment will help us create real jobs and work experience opportunities for vulnerable people who previously were unable to work.”
In its new report, ‘A Social Investment Fund for Bristol’, Resonance sets its sights on building a series of SITR funds, starting with Bristol and expanding from early 2015.
Photo credit: Zak Han