Big Society Bank

Big Society Capital Limited (BSC) is an independent social investment institution in the United Kingdom, which provides finance to organizations that support front-line social sector entities to help them grow. Social investment is about lending or investing money to achieve a social, as well as, financial return. BSC was the world's first social investment institution of its kind, established by the Cabinet Office and launched as an independent organisation with a £600m investment fund in April 2012. The investment fund comes from dormant bank accounts via an independent Reclaim Fund and four leading UK high street banks. The institution was set up as part of the Dormant Bank and Building Society Accounts Act 2008, which defined BSC as an organization that exists "to enable other bodies to give financial or other support to third sector organisations". (A third sector or a social sector organisation is "a body that exists to assist wholly or mainly for society or the environment".)

Big Society Capital is a "social investment wholesaler". This means that BSC does not directly invest in frontline organisations, but in Social Investment Finance Intermediaries (SIFIs). In turn SIFIs provide finance and support to social sector organisations. BSC receives funding from two sources:

1. Banks and building societies in the UK pay money from dormant accounts into the Reclaim Fund Limited. The Reclaim Fund keeps sufficient funds to meet reclaims from any account holders and passes surplus funds to the Big Lottery Fund. The Big Lottery Fund releases the English portion of these funds to the Big Society Trust to invest in Big Society Capital. BSC expects to receive up to £400 million from dormant accounts.

2. Four of the main UK banks (Barclays, HSBC, Lloyds Banking Group and RBS) have each agreed to invest up to £50 million in Big Society Capital.

Big Society Capital aims to make a transformative impact on the social investment market by supporting Social Investment Finance Intermediaries to become financially robust and effectively channel capital to the social sector. Moreover, it aims to increase awareness of, and confidence in, social investment by promoting best practice and sharing information; improving links between the social investment and mainstream financial markets; and working with other investors to embed social impact assessment into the investment decision-making process.

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