The Resonance Social Investment Tax Relief (SITR) Funds
Resonance offers two Social Investment Tax Relief (SITR) Funds, one with a focus on Bristol and surrounding areas and one on the West Midlands. The Resonance Bristol SITR Fund launched in February 2016 and the Resonance West Midlands SITR Fund launched in February 2018. Further regional funds are planned in due course.
The SITR Funds are dedicated to tackling poverty and disadvantage across their regional focus areas, through investment in successful, high impact social enterprises. The Funds give investors the opportunity to generate a financial return and tax relief benefits, whilst investing in a diversified portfolio of social enterprises that are committed to bringing about positive social change for some of the most deprived communities in these regions.
The Funds offer unsecured loans to social enterprises, working to tackle poverty and disadvantage, which need investment to grow their business and scale up the impact of their projects. It is not designed for start-ups.
The target for each Fund is to raise £5m initially, and then to keep raising investment on a quarterly basis and deploying on a roughly two year cycle. The Funds are “evergreen”, which means that they have no end date – the intention is to create a long-term investment resource for the regions on which they are focused. Individuals’ loans to social enterprises are usually for six years, and the Funds’ target investing period for each cohort of investors is over a two year period, so the overall time commitment for an investment in each Fund is between six to eight years.
Having a geographic focus means that the Funds can take a coordinated approach to building up a portfolio of investments, seeing the connections between social enterprises in the same area, and remaining close to the ground for both identification and monitoring of investments. It’s a good way to invest in social enterprises and also create a focused impact from that investment, even if the investors themselves have no particular connection with the area on which a particular fund may focus. This has been evidenced by the fact that to date over half of the investment in the Resonance Bristol SITR Fund came from individuals who are not Bristol based.