Repayable Grants: A Way Grant Funders Can Address Unmet Funding Needs in the Voluntary Sector

Introduction

This research explores repayable grants as a funding approach for charities and social enterprises. The research aims to understand whether repayable grants would better support the funding needs of VCSEs which are not met by traditional grants or social investment. The findings may be useful for funders interested in innovating to address VCSEs’ unmet funding needs, particularly funders with in-depth relationships with their recipient organisations.

Findings

The research found that repayable grants can help charities and social enterprises access funding that may not be available through traditional grants or loans. They provide flexible finance that can support organisational development and service delivery.

The research found that:

• repayable grants combine features of grants and loans

• they can reduce financial risk for organisations receiving funding

• flexible repayment terms can support organisations with uncertain income

• repayable grants can help organisations prepare for social investment

• this model can support new approaches to funding

Considerations

The report reviewed existing research and conducted exploratory research with stakeholders from across the sector. The evidence reflects emerging practice rather than a large evaluation. Outcomes may vary depending on programme design and the resources and experience of organisations.