Charities to Raise Funds on London Stock Exchange

An issuing platform enabling charities to take out loans through bonds listed on the London Stock Exchange has been launched in the UK.

Retail Charity Bonds is a new UK organisation designed to enable established UK charities with strong credit worth to raise capital market debt funding from retail and wholesale investors.

According to the organisation, the platform will provide charities with access to the market demand for fixed-income retail bonds at an affordable cost.

It says the bonds will open up a new dimension of borrowing and offer a lighter alternative to bank debt.

The scheme is supported by a number of partners including the UK Cabinet Office.

“The launch of Retail Charity Bonds is an important step for the sector, creating even more social investment opportunities while giving charities an additional source of funding to help them plan for the future. I hope investors and organisations take advantage of this opportunity to help strengthen the sector as a whole and support even more people in our society,” Nick Hurd, Minister for Civil Society, said.

Charities raising finance through the platform will use the loans to further their charitable activities and generate income. Funds generated are expected to be used by charities to acquire capital assets, invest in facilities or finance their existing assets more efficiently.

For investors, the platform is expected to provide new social investment opportunities, offering market-related returns while supporting charities in creating social benefit.

The program is an initiative of Allia, a charitable community benefit society, and has been established in association with Canaccord Genuity Limited.

“We are delighted to launch Retail Charity Bonds to provide charities with a new source of funding to deliver their mission. The platform is a major step forward in offering investors opportunities that both provide a financial return and create tangible social benefit,” Tim Jones, Chief Executive of Allia, said.

Adrian Bell of Canaccord Genuity said the bonds issued by Retail Charity Bonds would create a new transparent and liquid market for social investments

“It also offers charities the opportunity to access market demand for retail bonds at affordable cost, and engage with a new audience of investors,” he said.

The first bond issue is currently in development and is expected to be announced shortly.