Social investment is simply an investment for social purposes. Many schools were formed with social investment in the nineteenth century through public subscription for loans to build school buildings. Lending to charities and social enterprises may involve lending to organisations without a recognised trade or income. A number of special financial organisations have established themselves, specifically concentrating on social investment. These include banks, for example Charity Bank, Triodos Bank and Unity Trust Bank and smaller non-bank organisations with either a local remit (e.g. Aston Re-investment Trust) or a special interest remit, such as the financing of fair trade, (e.g. Shared Interest).
Wrigleys has advised many of these special social finance organisations, which have formed their own trade association, the Community Finance Development Association.
Social investment may involve a proper financial return but sometimes the return for the company making the investment can be less than market rate but involve tax relief.
For over 20 years Solicitors at Wrigleys have been involved in community share
issues and community of interest share and bond issues. Fair trade, renewable energy, community shops and pubs and railways have all featured in advertisements for community shares investment. Enterprise Incentive Scheme Tax Relief may be available for investors.
Wrigleys has also contributed to the development of this area through its involvement with European Commission studies on the
regulation of social banks in Europe, the publication for the Charities Aid Foundation of the book Social Investment and other financing techniques for voluntary organisations and advice to some of the organisations leading the field of social investment.
The Charity Commission has also published guidance on Charities and Social Investment. It explains how charities may make loans or share capital investments to pursue a charity's social objectives.