Rethink Ireland, in collaboration with Community Finance Ireland, and the Department of Rural and Community Development via the Dormant Accounts Fund, have introduced the second open call for applications to their Hybrid Social Finance loan.
The scheme is aimed at supporting up to 20 social enterprises that are first-time borrowers. This fund will offer a mix of a loan that must be paid back, along with a non-repayable loan and business support.
The Department of Rural and Community Development via the Dormant Accounts Fund has committed €890,000 for this scheme. In addition, Community Finance Ireland will provide approximately €500,000 in repayable loans.
A key requirement for applicants is that their social enterprise must not have borrowed money before.
Each Award will include:
- A repayable loan between €10,000 and €50,000 provided by Community Finance Ireland (which can be financed over five years at a competitive rate)
- A non-repayable loan for up to the same amount provided by Rethink Ireland (between €10,000 and €50,000)
- A business supports package for the amount of €10,000 (which includes one to one consultancy supports and Accelerator workshops)
Upcoming Q&A sessions:
The deadline for applications is 8 December 2023 at 1 pm via the Rethink Ireland website.
Questions can be also directed to firstname.lastname@example.org.
From Rethink Ireland: https://rethinkireland.ie/current_fund/hybrid-social-finance-loan-2023-2024/
The Hybrid Social Finance Loan is a partnership between Rethink Ireland, Community Finance Ireland and the Department of Rural and Community Development via the Dormant Accounts Fund. It aims to build the capacity of start-up social enterprises that are first-time borrowers.
At present, there is a lack of investment readiness among social enterprises and there is no tailored financial instrument that fits the needs of the growing social enterprise market. The Hybrid Social Finance Loan aims to tackle these gaps following extensive research on financial instruments for social enterprises in Ireland and consultation with the sector.
This unique new financial instrument will provide a combination of a repayable loan, a non-repayable loan and business support for up to 20 social enterprises in total through two open calls. The Department of Rural and Community Development has committed €890,000 for this. In addition, Community Finance Ireland will provide approximately €500,000 in repayable loans.
Each Award will include:
- A total loan of between €20,000 and €100,000 which includes
- A repayable loan between €10,000 and €50,000 provided by Community Finance Ireland which can be financed over five years at a competitive rate.
- A non-repayable loan for up to the same amount provided by Rethink Ireland upon delivery of agreed milestones. It will be paid in two installments, over a period of one year, at the start and end of the six-month capacity-building programme.
2. Capacity building supports for the amount of €10,000 provided by Rethink Ireland which includes tailored Business support and a place on a six-month Rethink Ireland Accelerator Programme.
- Business support will focus on improving the investment readiness of the selected social enterprises. Business support will be tailored to the specific needs of each social enterprise and carried out by approved consultants.
- Rethink Ireland’s Accelerator is a unique offer, equipping Awardees with the skills needed to expand and deepen their impact. It provides training from best-in-class experts across the private, nonprofit and public sector. Training is provided across a range of functions and may include Impact Management, Communications, Sustainability and Strategy, Equality, Diversity and Inclusion.
You can apply for the Hybrid Social Finance Loan via the online portalfrom Wednesday, May 10th 2023 to June 21st 2023 at 1pm.
Please join us for our application clinic to find out more and answer any questions that you have:
Who can apply
The Hybrid Social Finance Loan is open to start-up social enterprises that:
- Are first-time borrowers as a social enterprise and unattractive to mainstream traditional finance
- Have some trading record
- Must be able to demonstrate traded income to date
Eligibility & Criteria
Projects must meet both Rethink Ireland’s criteria and the specific criteria for the Hybrid Social Finance Loan, as set out below:
Rethink Ireland Criteria
- The project must address a critical social issue
- The project must be innovative in an Irish context.
- The project must be based on the island of Ireland and make its main impact in the Republic of Ireland.
- The project must have the potential and desire to scale or replicate in Ireland.
- The project must provide evidence that it is up and running, or be tested at least in a minimal way.
- Applicants must come from an entity that has a not-for-profit legal form, eg:
- company limited by guarantee
- social enterprise
- other not-for-profit legal forms
The Hybrid Social Finance Loan Core Criteria
- Start-up social enterprises
- Must be up and running
- Have some trading record
- First-time borrower as a social enterprise
- Tangible and measurable social impact
The criteria below will be considered advantageous in applications, however, organisations that meet the core criteria but do not meet the advantageous criteria are encouraged to apply.
Projects incorporating the below in their application will have an advantage:
- Social enterprises engaging meaningfully with minority/ disadvantaged groups including but not limited to those led by women, ex-prisoners, recovering addicts, travellers, and migrants.
- Social enterprises that have a positive effect on Ireland’s Green Transition through their activities/interventions. This criteria applies if the social enterprise tackles issues related to the environment and green transition such as carbon reduction, biodiversity, sustainable agriculture, pollution and/or the just transition.
Which projects cannot apply?
Projects that are not eligible to apply are:
- Projects where research is the primary activity
- Projects seeking to use the non-repayable loan for large capital items (such as buildings, vans, renovations or land)
- Projects promoting or aligned with a political party
- Projects that only accept participants of a particular faith or religious denomination
- Projects focused on animal welfare
- Projects based outside the Republic of Ireland
- Projects led by people under 18 years of age
- Projects that are an idea (only) and that have not yet started
Which applicants cannot apply?
Applicants that are not eligible to apply are:
- Applicants under 18 years of age
- Commercial companies, sole traders and individuals
- Any staff member from Rethink Ireland, Community Finance Ireland and Department of Rural and Community Development staff, Directors and their family members. Family members include siblings, parents, spouses or civil partners or children.
- Individuals, statutory or public bodies, local development companies, LEADER companies, companies limited by shares, and organisations that are funded 100% by state bodies or agencies and continue to be in receipt of that funding.
- Any consultant currently working with Rethink Ireland.
If my organisation has previously received an award from Rethink Ireland, can I still apply?
Yes. If you have previously been funded by Rethink Ireland, you can still apply. Previous awardees must be able to demonstrate they have performed well on a previous programme and capture in the application form how the new funding being applied for is a logical continuation from the original investment, fitting the new Fund criteria in particular.
If my organisation is currently in receipt of an award from Rethink Ireland, can I still apply?
Projects on one of our Funds that have cash grant payments remaining before the commencement of the new fund programme are not eligible to apply.
Organisations on one of our Funds that have cash grant payments remaining before the commencement of the new fund programme are still eligible to apply with a different project and different project lead.
Is this just for large-scale, national organisations?
No, it is not, the Hybris Social Finance Loan is targeting start up social enterprises once it is a not-for-profit organisation with a legal form (see criteria above).
Can I apply for this funding even though I am still in the ideation stage?
Unfortunately no, your social enterprise must be able to demonstrate some traded income to date.
If my organisation is funded by a Government/state agency (HSE, TULSA etc) are we eligible?
Yes, you can apply if you are in receipt of funding from a government or state agency. However, if your organisation is 100% funded through state sources then you are not eligible to apply to the Fund.
Is it possible for organisations to collaborate in an application (e.g. a community development organisation and an educational provider)?
They can and one organisation should take the lead. Please refer to the eligibility criteria to ensure that your application is eligible for funding.
What does the fund offer?
The Fund will offer up to 20 start-up social enterprises a combination of a repayable loan, a non-repayable loan and a business support package, to help them expand and increase their social impact.
- A total loan of between €20,000 and €100,000 which includes
- A repayable loan between €10,000 and €50,000 provided by Community Finance Ireland which can be financed over 5 years at a competitive rate.
- A non-repayable loan for up to the same amount provided by Rethink Ireland upon delivery of agreed milestones. It will be paid in 2 installments, over a period of 1 year, at the start and end of the 6-month capacity-building programme.
- Capacity building support to the value of €10,000 provided by Rethink Ireland which includes:
- A place on the six-month Rethink Ireland’s Accelerator Programme equipping Awardees with the skills needed to expand and deepen their impact, delivered by best-in-class experts across the private, nonprofit and public sector
- Bespoke business and capacity building support focusing on improving the investment readiness of the selected social enterprises, tailored to the specific needs of each social enterprise and carried out by approved consultants, designed in consultation with the successful projects on topics such as strategic planning, maximising your impact, communications, storytelling and fundraising.
- Access to Rethink Ireland’s networks and the opportunity to develop networks and contacts with the other Awardees on the Programme which are often very valuable in the longer term
* Community Finance Ireland will decide on the repayable loan. Rethink Ireland’s Board will make the final decision on the non-repayable loan amount but generally, it will be for the same amount as the repayable loan.
What can the Hybrid Social Finance Loan be spent on?
The non-repayable loan provided by Rethink Ireland may be used to cover operations/staff costs (working capital) and up to 50% on equipment. It cannot be used to pay off debts or for large capital items such as renovations, or for vehicles, land or buildings..
The repayable loan provided by Community Finance Ireland can be spent in line with the social enterprise’s needs, including capital investments, following approval from Community Finance Ireland. Applicants will submit a budget as part of their application and must be able to demonstrate in their application how this is facilitating your Social Enterprise.
What is expected of Awardees?
The project lead will be expected to take part in the six-month Accelerator Programme, which includes attending approximately 6 workshops and spending time working 1:1 with a business/strategy consultant.
How do we apply
What is involved in completing the application form?
The Hybrid Social Finance Loan consists of two open calls, approximately ten organisations will be selected in each round. Round One of the Hybrid Social Finance Loan will open for applications on May 10th, 2023 for six weeks, until June 21st, 2023. Applicants will complete an application form which will be submitted via Rethink Ireland’s online platform. The second round of the Hybrid Social Finance Loan will open in October 2023.
What kind of video do we need to submit? Optional
This video is optional and don’t worry – you don’t need to produce a high-quality or expensive video. You can use a smartphone or tablet. We just want to hear you telling the story of your project in 2 – 3 mins max. Please tell us:
- who you are
- why you are applying for the award
- the problem/issue your project is trying to solve
- how you will do that
- how your solution is innovative or creative.
You can then upload your video to YouTube or Vimeo and password-protect it if you wish. You can insert the URL link and the password in the application form.
What financial information do we need to submit with our application?
- The project’s latest management accounts and previous 3 years signed Audited Annual Accounts (or since registered if less than 3 years ago).
- Detailed budget and financial projections for the next three years. All applicants must outline how they intend to use the non-repayable loan provided by Rethink Ireland and the repayable loan provided by Community Finance Ireland and upload a proposed budget. A spreadsheet template is provided in the relevant section of the application form.
- Provide a 12-Month Cash Flow to include, group resources invested, donations /fundraising/ grant monies, project costs including professional fees, and Community Finance Ireland proposed bridging/term loan repayments.
- Provide a copy of the most recent Bank Statement relating to each account.
- Provide a professional quote or copy of the agreed signed tender contract relating to each project cost if purchasing equipment or developing any infrastructure project.
- A Business plan (if available) that outlines the mission, goals, target market, marketing strategy, and operational plan.
Other documentation required:
- Copy of Memo & Articles of Association/Cert of Incorporation/Constitution.
How do we upload our project budget (planned income and expenditure)?
In the relevant section of the application form, you will be provided with a link to a budget template in excel. Please click on the link provided and DOWNLOAD this document to your computer. Then fill in your financial information and save the document with your project’s name and then upload it (as an Excel file)in the relevant section of the application form.
We have tried to make the application process as accessible as possible but we understand that there may still be some difficulties for applicants. If you haveaccess needs or are struggling with the application form, please contact email@example.com
What happens after we submit our application?
- Applications will go through a rigorous selection process (for more information see below).
- Successful applicants will be informed in mid-October.
- The non-repayable loan provided by Rethink Ireland will be delivered in two parts – one at the beginning and one at the end of the 6-month Accelerator programme and are tied to agreed performance milestones. The repayable loan provided by Community Finance Ireland will be distributed following the agreed bespoke loan drawdown schedule defined in their loan letter with Community Finance Ireland.
- The Accelerator Programme will run for approx six months from December 2023.
- The Accelerator supports will be designed in consultation with the awardees and reflect organisational/project needs.
- Round 1 Awardees will finalise their programme in May 2024.
How does the selection process work?
The selection process is very rigorous and consists of a number of stages:
- Open call for applications (May 10th – June 21st)
- Eligibility Review (June 22nd – June 28th)
- Internal and External Reviews, applications are assessed based on impact, innovation, scalability, sustainability (June 30th to July 14th)
- Due Diligence/Governance checks on shortlisted applicants (July 20th – August 3rd).
- Financial Review ( June 22nd to September 18th)
- Final decisions by Rethink Ireland’s Board (mid-October)
Who will decide who wins the awards?
All applications will be reviewed thoroughly through a rigorous process. The Board of Rethink Ireland will make the final decision on successful applicants and the number and value of the final non-repayable loan, while CFI is responsible to issue a loan letter to the selected Awardees for the repayable loan given.
How do applicants find out where they are in the selection process?
We will contact all applicants by email to let them know whether or not they have been shortlisted. When final decisions have been made on the successful applicants, we will contact all shortlisted applicants by phone or email to let them know whether they have been successful.
Terms and Conditions of the Fund
By applying for The Hybrid Social Finance Loan, you agree to the following terms and conditions.
- You are 18 years of age or older.
- You have given full and truthful information, both verbal and written, at all stages of the application and selection process.
- You are eligible to apply. This means that your organisation meets the criteriafor Rethink Ireland and, as described.
- You have the right to apply. This means that you hold the necessary rights to carry out the project.
- By sending in your application, you accept these terms and conditions and our Privacy Statement. If you do not comply with these terms and conditions, you may be disqualified and may have to return any award granted.
- Rethink Ireland will hold the personal details which you submitted with your application form. We will only share this information with the third parties administering the application and selection process unless we agree otherwise with you. Please see our Privacy Statement for full details.
- The Awardees must take part in publicity about the grant. Rethink Ireland reserves the right to publish the names of organisations that are successful in their applications.
- If you decline an award or if the award is taken back because you did not comply with the terms and conditions, the Directors may select an alternative Awardee.
- Rethink Ireland reserves the right to disqualify any entrant, to change the terms and conditions without notice, or to cancel the application process at any stage.
- Where relevant, applicant organisations must be fully compliant with guidelines, regulations and legislation applicable to their project, for instance, Children First guidelines and child protection regulations.
Check out our ‘Rethinking Innovation in Social Finance Report’ here.
The ‘Financing Social Enterprise in Ireland – Models of Impact and Readiness’ consortium are delighted to launch the ‘Rethinking Innovation in Social Finance Report. After 2 years of collaboration with the social enterprise sector, support organisations and social finance expertise we are celebrating our work in the Central Bank 30th November 2022.
The purpose of the project is to contribute to the development of the social finance sector in Ireland by developing financial instruments for social enterprises and supporting the wide range of social enterprise organisations working within any area that falls under the National Social Enterprise Policy definition. At present, there is no tailored financial instrument or specific statutory budget that fits the needs of the growing social enterprise market. Moreover, there is a lack of investment readiness among social enterprises. This project seeks to address these challenges through a participatory approach beginning at the research phase and continuing throughout the project implementation. The outreach, marketing and networking actions will aim to inform and get ‘buy-in’ from stakeholders in the social enterprise landscape.
You can read more about the project through our report here.
As an all-island body, Community Finance Ireland (CFI) is among those uniquely positioned to recognise the part Philanthropy has played in the economic regeneration and rural development of Northern Ireland and the southern border region over the past 40 years. Organisations such as the International Fund for Ireland, and The Atlantic Philanthropies became household names to those within the CVSE, given the millions gifted to communities in the name of employment creation, peace and reconciliation.
Yet a common denominator in every philanthropic fund is the finite level of capital available. As one catchy advertisement reminds us; “When it’s gone, it’s really gone!” To many this inevitability is understood, unless you have developed a total dependency on that form of support, without ever having been encouraged or facilitated to diversify between philanthropy and earned income.
Presently in Ireland (2022), the social finance instruments available to the CVSE sector take the form of short term bridging, and longer term loans (up to 15 years). Across the island over the past 20 years, social finance providers such as Community Finance Ireland and Clann Credo have directly connected with communities and social enterprises to make well in excess of €200m in social finance available to groups. A good news story in itself.
Yet behind this figure is likely to be a similar quantum of request for support from potential projects which will have fallen outside the relatively flexible lending criteria in place for accessing social finance in its present construct. The bulk of social finance available today is sourced via the Social Finance Foundation, which in turn buys capital from the Irish Banks at an interest cost.
Thus, whilst these social finance providers are registered charities, both are charged interest on the capital they use, and carry risk on losses accrued. This dictates the level of risk appetite open to them in supporting projects which may be high on impact potential, but with little or no track record. The need to remain as credible, sustainable providers of social finance to the sector in Ireland overarches this policy.
Enter the idea of a capital source, seeking social impact first and foremost, and whilst repayments are not of paramount importance, it acknowledges the potential benefits accrued in the concept of recycling.
To date, a simplistic philanthropic model sees a gift made to a worthy cause, impact achieved once courtesy of this support, and the fund depletes over time.
A precedent set involves Community Finance Ireland partnering with another Belfast Charitable Society (BCS), whereby BCS made available funds for onward lending through the Building Better Futures Fund. By the end of the fund, CFI had facilitated BCS impacting 51 organisations, spread throughout Northern Ireland. All the capital was repaid, and available for use in other supportive causes.
By linking philanthropy with social finance, the possibility of this same altruism being recycled to have multiple social impacts across a variety of organisations that might otherwise never have been able to access repayable finance becomes possible.
According to https://creditunion.ie , some 3.6 million members of the Irish Credit Unions affiliated to the Irish league of Credit Unions (ILCU) have amassed combined savings of €16.31 billion, with €4.89 billion being made available in loans to these same members (as of March 2021). Another 50 large Credit Unions are affiliated with the Credit Union Development Association (CUDA) whose member savings further bolster this asset base (https://cuda.ie ).
The Credit Union structure is very much driven by a not for profit ethos, existing solely for the benefit of its members, not stock markets. As is the case with Community Finance Ireland, a Credit Union is owned by its members. They have no hidden administration or transaction fees, with notable flexibility regarding loan repayments.
On the face of it, the capital from the local Credit Unions, and the experience of Social Finance Organisations, with a greater regional and national focus, would seem like a match made in some higher universe! The purest form of community finance some might say.
One sector serves (almost exclusively) the individual within the community and is replete with capital, whilst the other serves structured collectives within the community, and is continuously seeking to diversify its source of capital – ideally on terms and conditions in line with the not for profit ethos which its ecosystem prescribes to.
Left to its own devices, the Credit Union continues to show an eagerness to think outside the box. In recent years, the “It Makes Sense Loan” project endeavoured to afford the most marginalised in society access to the Irish financial system. Even more recently, the development of a mortgage product from elements within the CU movement underpins this ambition to push on.
Indeed it should be acknowledged that a number of Credit Unions have already reached out to Community Finance Ireland with a view to collaborating on a capital deployment partnership. However, it is apparent that success here is dependent on sufficient buy in from the Central Bank as regulator, given this could be another new departure in the Credit Union’s attempt to have their deposits achieve maximum impact and, indeed, greater return.