Crowdfunding comes of age

Written by Bevis Watts on 17th Apr 2018

This article first appeared in Pioneers Post Quarterly, issue 9, www.pioneerspost.comPioneers Post, is the quarterly magazine for social enterprises, impact investors and responsible business. 

As the interest in crowdfunding has grown over recent years, it has been gratifying to see the explosion in impact investing, particularly in the UK where we now have over 19 million people expressing an interest in positive investment – roughly half of the eligible population.

The question for us at Triodos Bank is, how do we translate that interest into tangible capital investment, in order to accelerate our transition to a low-carbon, sustainable and fair society?

To help answer this question, Triodos last year participated in a national government task force reviewing social impacting investing in the UK. The resulting report outlines key recommendations to help grow the number of social impact investors across the country and ensure financial providers empower people to support the issues they care about through their savings and investment choices. It revealed a growing interest among individuals for their investments to have a positive impact on society, as well as delivering good financial returns.

However, despite this increase in demand, the social impact investing market remains underdeveloped. The report urges the government and industry to increase the number of social impact investment opportunities in the market, making it easier for people to invest.

This report, coupled with the staggering 43 per cent year-on-year increase in the ‘alternative finance’ market, demonstrates an enormous opportunity to bring together the rapidly increasing cash flows in alternative finance with the growing interest in social impact investing.

So this year Triodos took the unprecedented step of becoming the first bank in the UK to launch a crowdfunding platform

We know investors and savers are looking for opportunities that allow them to support progressive companies, social enterprises and charities, while also receiving good long-term returns.

With a track record spanning over 15 years, we’ve been connecting ethically minded investors directly with positive organisations since before crowdfunding became a well-known term. But having our own online platform enables us to grow the huge potential of crowdfunding and address the demand for Innovative Finance ISAs, enabling people to get their returns completely tax-free within their £20,000 personal allowance.

What are the most ethical crowdfunding platforms you can invest on using this year’s ISA allowance? Check here for Good With Money’s top picks 

We join a number of pioneering organisations, such as Ethex, Abundance and Mongoose that are harnessing the interest in crowdfunding to raise capital for organisations delivering a positive impact.

It’s important to us that we provide a reliable platform for people to invest with confidence in the sectors they feel passionately about, safe in the knowledge that we’ve extensively screened the projects for environmental impact, viability of their business model, and credibility of their management team.

We know investors and savers are looking for opportunities that allow them to support progressive companies, social enterprises and charities, while also receiving good long-term returns. Our ambition is to help facilitate this by becoming a one-stop-shop for ethical investments be it through ISAs, savings or direct investments. Last year we also launched a current account, allowing people to merge their values with their everyday banking.

Investors can make a positive choice to shape the world they want to live in. In that sense money can be a hugely powerful form of democracy if invested directly into renewable energy, social housing, charities or social enterprises. With more and more people joining the movement to create positive change, we simply have to ask ourselves, where do we want to cast our vote? 

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