Last week's long-overdue Big Society Capital (www.bigsocietycapital.co.uk) launch was received with a predictable combination of enthusiasm and scepticism. However the real test of benefits to the not-for-profit sector will be its performance once it starts lending or investing - not to mention ensuring their website doesn't fall over with the demand for information!
It will be interesting to watch how the Bank overcomes the issue of security - they will have to lend or invest on a cash flow basis, which as we know the mainstream banks avoid at the present time.
Sure, there have been others, Futurebuilders and the like, who have taken on this challenge and undertaken long term lending. Result? The funds have been wound up and are now administered by the Social Investment Fund.
Of course Charity Bank has been successful with this model, but you have to ask whether there is actually £600 million worth of demand out there. Charity Bank has loaned around £80 million or so and has only just made a surplus - and they appear to loan to the same customer group that the Big Society Capital will. Oh...and have a look at Charity Bank's history - it would appear to have had requests for more than £100 million back in 2006!
In an age when the government is putting pressure on not-for-profits to become more efficient and effective, it seems to be giving quite a different impression by setting up the Big Society Capital...perhaps there is another agenda behind this move than the one we are led to believe?
So where does all this leave us? I am enthusiastic about it having been at the sharp end of trying, often without success, to find funds for clients who have good ideas, supportable cash flows and solid track records on delivery. But at the same time I'm putting my cynic's hat firmly on until we see what Big Society Capital is prepared to fund.
For the government's sake, I do hope that the operating costs don't outweigh the undoubted benefits it could bring to the not-for-profit sector.