2. overview outcomes-focused investment priorities. investing over 3 years (2008 – 2011) and beyond. a fundamentally different approach to previous grant regimes. investments tailored to individual organisations requirements. loans, ‘patient’ capital, and strategic investments. A new £30m fund being subscribed over three years to invest in building the capacity, capabilities and sustainability of third sector organisations.

3. target characteristics have been operating successfully, partly through income generation, for at least three years. have established successful experience in public service delivery or trading in other markets. have potential to grow their turnover and/or become financially sustainable. are ‘investment-ready’ in terms of management, governance and financial position. established third sector organisations located and trading in Scotland which reinvest surpluses for social or environmental purposes and:-

4. ineligible organisations with no track record of generating income other than grants. organisations that are insolvent or at risk of insolvency. proposals that seek to replace existing debt finance. subsidiaries of public bodies (e.g. local authorities). housing construction and management operations of registered social landlords (RSLs). proposals that relate to the on-going delivery costs of services or projects. proposals that would normally be funded by commercial loan finance or other funding sources. organisations where the beneficiaries live outside Scotland.

5. investment priorities employability environmental action the underlying causes of health inequality Other priorities will emerge as the fund develops. 2008/09 investment priorities will focus on organisations with social missions that address issues of:

6. investment products loans - business plans will assessed for loan first (including commercial loans) before any other investment is considered. risk/’patient’ capital - devised to deliver a mix of financial and social returns. strategic investments - (non-repayable) amounts based on social outcomes and will not comprise more than 50% of any funding package development support – for organisations ‘almost but not quite’ investment-ready. SIF will consider funding to pay for accounting or legal advice/support in relation to areas such as marketing, human resources, investments will be tailored on a case by case basis and may contain a mix of :-

7. investment process initial screening against published investment criteria to establish eligibility and ‘investment-readiness’. collection of brief details of the organisation and the investment being sought. discussion/feedback to assess ‘fit’ with investment priorities. rigorous assessment of business plan, focused on four elements – business model – organisational development – financial stability – projected social outcomes. development of investment package, submission to investment panel with recommendations. approval and documentation monitoring and evaluation.

8. Social Investment Scotland Second Floor 1/2 St Andrew Square Edinburgh EH2 2BD 0131 558 7706 www.socialinvestmentscotland.com