‘For them it’s very much been business as usual and the Big Society is an issue for society and not for banks.’
Charity Bank CEO Malcolm Hayday, pictured, says mainstream banks have not shown enthusiasm for social ISAs to date
The idea of a Big Society ISA – promoted by new government guru Lord Nat Wei at the weekend – will face difficulties with mainstream banks, warns Charity Bank CEO Malcolm Hayday.
Wei, who is prime minister David Cameron’s advisor on the Big Society, told a weekend paper he expected the ISA to be popular with baby boomers.
However, Hayday told Social Enterprise he did not expect mainstream banks to jump at the chance of offering a social ISA. Charity Bank has been retailing a successful charity ISA for the past two years without drawing the attention of competitors, Hayday pointed out.
‘We’ve seen no bank, with the possible exception of The Co-operative Bank, respond either to the existence of Charity Bank or Triodos Bank in the marketplace,’ said Hayday.
‘For them it’s very much been business as usual and the Big Society is an issue for society and not for banks.’
Hayday said he could also see major administration problems for mainstream banks if they were to run an ISA that guaranteed the money was invested in social projects. This is because they would need to separate the money out from the rest of their loan book and also find the social projects to invest in.
However, he added that both of Charity Bank’s ISAs had been popular with consumers, quickly raising the target of £5m each year, and the bank was now retailing an ISA for a third year.
A Cabinet Office press spokesperson said the Big Society Bank would ‘start a fire under the already growing social investment market’.
He said: ‘[The bank] will show this is a growing market and will inspire a range of new financial products that give both a financial and social return.’
However, Hayday was also concerned about the possible role of the Big Society Bank in promoting an ISA.
Wei was reported in The Guardian as saying the ISAs could form a revenue stream for the Big Society Bank.
This would appear to indicate that the bank would be retailing its own products.
However, government advice until now has been that the Big Society Bank would act as a wholesale institution, providing funds only to social lenders, and not dealing in consumer retail products like ISAs. Hayday said that further clarification of the new institution’s role was needed.
He added that he hoped the Big Society Bank would come up with new social investment products and ideas to promote and not ones that already existed in the marketplace.
...as Susan Boyle might have sung. On SocialEnterpriselive.com this week:
Like what you read? Sign up for our weekly news bulletin and follow us on Twitter.
Roots HR cic is a vibrant social enterprise providing human resources services to charities, voluntary and community sector organisations and of course other social enterprises. We are passionate about great people management and offer practical, cost-effective solutions tailored to your workforce, the culture and values of your organisation. Our services are designed to help organisations to comply with employment law and to perform through great people management.
Contact:
Jan Golding, Chief Executive
t: 0845 543 8429
e: info@rootshr.org.uk
w: www.rootshr.org.uk
Comments
You might look at some child
You might look at some child protective services sights from the US.
IT Support
Private investment in social innovation
Not entirely a new idea, as you'll see from my suggestion for last year's Social Enterprise Summit.
"I have an idea which might be a lot simpler to administer and perhaps be more aligned to the concept of social action based on market revenue
rather than donations.
In the model proposed by PCED
12 years ago, it was question of modifying the company articles to make a social cause the primary purpose, agreed to by shareholders as being the entire point of the business.
Alongside, seed capital for new "social" business might be provided by a trust fund, it was suggested.
So, why not give both private individuals and business the opportunity to invest at a higher rate of return than the conventional investment banks
with the same security as afforded by government to current lenders?
Actioned as part of a recovery plan, with the trust itself non proifit making, might well be more cost effective strategy than pumping money into
collapsed banks.
Meanwhile in the US these ideas are moving forward as reported by Change.gov with the Obama Biden
team planning to:
l Create a Social Investment Fund Network: Use federal seed money to leverage private sector funding to improve local innovation, test
the impact of new ideas, and expand successful programs to scale.
l Social Entrepreneurship Agency for Nonprofits: Create an agency within the Corporation for National and Community Service
dedicated to building the capacity and effectiveness of the nonprofit sector."
http://www.box.net/shared/ckzbep5h26
The point I make about this is that unlike Big Society, the whole thing had been thought though with the benefit of having a 10 year start as advocates.
That led to a proposal to another government for encouraging private investment into a social investment fund:
"Any number of other social enterprises can be created. Furthermore, any number of existing for-profit enterprises are entirely free to contribute any percentage of profits they wish to increase the proposed initial $1.5 billion social investment fund. If for example the total fund comes to $3 billion, that amount would generate at least $300 million per year in a hryvnia deposit accounts at any one of several major Ukrainian banks, to provide ongoing funding to continue to create and expand social enterprises.
"This strategy places adequate funding for social benefit under control and management independent of government and the very obvious vicissitudes and conflicts inherent therein."
http://en.for-ua.com/analytics/2007/08/09/110003.html
Jeff Mowatt
People-Centered Economic Development
p-ced.com
people-centered.net