A government-backed pilot scheme, which could lead to millions of pounds being invested in charities and not-for-profit organisations struggling to raise funding, has been launched in Brighton today.

The pilot, being launched by Charities Aid Foundation, will be funded with £65,000 from the Cabinet Office-funded Innovation in Giving Fund, managed by Nesta, and £50,000 from Legal and General.

Under the Social Enterprise Assist scheme, fledgling social enterprises will be offered interest free loans of up to £10,000 as well as mentoring from Legal & General staff, and up to £5,000 worth of expert consultancy.

If successful, the pilot could be rolled out nationwide, with charities and other social enterprises in the Brighton and Hove area being offered interest free loans, mentors and expert business advice.

Brighton Pavilion MP Caroline Lucas spoke at today’s launch alongside the Minister for Social Enterprise Jo Swinson and CAF Chief Executive John Low.

Caroline said:

“I’m delighted that Brighton and Hove will be the first to benefit from this scheme to support charities and social enterprises, and hope it will give the city’s outstanding third sector the boost it deserves.

“The Government’s ill-considered ‘Big Society’ idea was dismissed by many because it failed to explain how charities, churches or other volunteer groups could provide crucial services to the public without the necessary funding.

“This new scheme is a welcome recognition of the need to leverage proper funding for charities and social enterprises, as well as to provide access to mentoring and advice, so that this dynamic sector can succeed and flourish."

John Low, Chief Executive of the Charities Aid Foundation, said:

“Social Enterprises have the power to tackle many intractable problems in our communities, but often flounder because commercial lenders regard them as too risky to support.

“There is still a chronic lack of funding for fledgling social enterprises which are looking to expand – we need lenders to step in and back these dynamic social enterprises with hard cash and business advice so they have the support they need to succeed.

“These entrepreneurial organisations can make a massive difference, supporting some of the most vulnerable people in society.

“Without this sort of backing the Government’s vision of a greater role for community groups, social enterprises and charities in delivering local services will remain aspirational.

“We need others in financial services to follow the great lead shown by Legal & General in providing start up capital and vital business advice which can get great projects off the ground.”

ENDS