22nd April 2016 vincent

Mission and vision

Allia is a charity that supports social ventures through business support, workspace and social finance. Their main products, charitable bonds, are an ethical five-year savings scheme, where some or all of the interest an investor could earn, plus the profit that a bank would normally take for itself (the arbitrage), is donated to a charity of the investor’s choice. This scheme allows investors to make a low-risk ethical investment in social housing and donate the yield upfront in support of various charitable projects.

Description of scaling process

Allia decided to launch its ‘retail charity bonds’ scheme after the Order Book for Retail Bonds (ORB) done by the London Stock Exchange in 2010. Thanks to the experience gained during the first years of operation with social bonds, Allia immediately identified the opportunity provided by the change of regulation by the London Stock Exchange. These new schemes allowed individual investors to buy and resell bonds and for the social entrepreneurs it represented a cheaper way to finance investments. In fact, the bonds are in the format of loans given by investors (from £10) to a company. Allia mainly helps to finance social housing.

Since launch, over £4.7 billion has been invested in retail bonds for a variety of different issuers such as Tesco and National Grid. Following the financial crisis investors were looking for predictable, fixed rate income opportunities with social impact. Since bond issue companies have to be publicly listed in the stock exchange and charities are not allowed, though the opportunity appeared in 2010, the first subscription opened successfully only in 2014.

During recent years, the new instrument issued bonds with a total value of 37,643 million GBP. For example, in July 2014 Golden Lane Housing obtained 11 million GBP in just eight days using Allia’s platform. It has enabled Golden Lane Housing in one year to purchase 24 homes for people with learning disabilities. Nearly 90 people have moved in or are planning to move into much-needed houses that have been specially adapted to meet their current and future care and support needs.

In addition, Allia has established two social business centres in Cambridge and Peterborough, The Talent Nurture Fund in South Wales, Launch Pad North East and SkillsBridge based in Newcastle and the Social Incubator East in Cambridge.