In the US, less than 1% of venture capital goes to social entrepreneurs. In the UK, the figure is closer to 5%.
Now two big players in the financial world are coming together to create a $25 million fund that will invest in social businesses, Mashable reports.
The Growth Impact Fund, being developed by Big Issue Invest and Shift, will offer " flexible and patient capital for social businesses to grow their impact," according to a press release.
It's designed "to make social investment work better for social businesses by: investing investees patient, flexible capital, with options including 70% of funding invested through equity and quasi-equity products," according to the press release.
"We are committed to helping tackle social inequality today and the building of sustainable solutions for the next generation and beyond," Bernard Mensah, president of international at Bank of America, says in the press release.
Seb Elsworth, CEO of the Foundation for Social Investment, adds in the press release that "a core motivation for this was to ensure a flow of capital to parts of the market that are underserved, often minoritised groups and communities that have too often been excluded by previous investment programs."
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Dr. Rajiv Shah, the Administrator of the U.S. Agency for International Development (USAID) leads the U.S. government’s efforts to end extreme poverty. He chose to participate in the impact investing conference at the Vatican and met with Pope Francis directly to address world poverty, the future of impact investing, and promotion of resilient, vibrant democratic societies worldwide.