Social Investment for Community Development: Completing the Half-built House

This report encourages policy-makers to address policy shortcomings to support social investment for community development in the U.K.Community development finance institutions (CDFIs) are part of the network of institutions that can work together to form an effective social investment market, which can channel funds to social and community enterprises. This social investment market place requires a supportive policy environment with requisite tax and legislative mechanisms to build and sustain social investment institutions. However, the architecture for such a market in the U.K. is incomplete and CDFIs have not been able to attract sufficient private investment or public funding.In order to complete the infrastructure for a thriving social investment market, the report recommends:

• Implementation of a simple tax mechanism;
• Legislation for compulsory disclosure by financial institutions of lending and investment in disadvantaged areas;
• Establishment of a grant fund for long term public support of CDFIs;
• Creation of a matched funding scheme to incentivise charitable foundations to invest in social enterprises;
• Development of a new social finance institution that can act as a wholesale organization to link the social and financial sectors.