The Charitable Bond is an ethical savings bond that allows investors to share the interest with their chosen charity.
Many individual and corporate citizens believe in the importance of giving money to charity. Some of these may have capital in the form of savings or cash reserves but a limited amount of revenue available to give away.
The Charitable Bond allows them to use this capital in a low-risk ethical investment that brings forward future interest in an upfront donation to their chosen charity.
How the Charitable Bond works
The model works by raising investment through a bond issued by Allia and on-lending it at a fixed rate to a social housing provider with a single repayment with compound interest after five years.
Since the rate is fixed, the yield can be discounted either in part or full at the choice of the investor and paid upfront to the investor’s nominated charity. Any remainder can be paid to the investor on maturity.
To date, Allia has raised around £30m of investments in Charitable Bonds.