Triodos has been at the forefront of a new kind of finance for charities – directly connecting those wanting to invest with a purpose to organisations creating social and environmental impact – since 2003. That year, England won the Rugby World Cup for the first and only time, Hollywood star Arnold Schwarzenegger was elected as Governor of Califiornia, and Concorde made its last commercial flight.

Triodos successfully raised the first charity bond in the UK for Golden Lane Housing in 2003, one of the UK's leading supported housing landlords for people with a learning disability. More recently, the bank has raised this kind of funding through its crowdfunding platform, the first to be launched by a bank, which started in 2018.

“There’s no doubt that the operating environment for charities over the past decade has been tough,” says Whitni Thomas, Head of Corporate Finance at Triodos Bank UK. “Whilst the funding environment is a part of these challenges, there are other tools in the toolbox apart from grants and donations. There’s a really good role for repayable capital to play, especially when it’s structured in the right way, which is why Triodos set up our crowdfunding platform to channel investment to organisations like Paces.”

From a bond offer to big impact: how we raised £1.5M for Paces

Paces Sheffield is a South Yorkshire charity providing Conductive Education to children and adults with motor neurological disorders such as cerebral palsy. 

Paces Head of Conductive Education, Ruth Liu, explains: “Conductive Education looks at the child, young person or adult as a whole rather than compartmentalising their needs. We’re trying to develop them holistically, developing physical skills and independent living skills. 

Speaking about demand for places at the school, Ruth adds: “We are so very nearly full, and parents and local authorities are still asking us for places for more young people. So the demand is absolutely there, and will continue to be there.”

Facing the need to find a new site with space to expand, they turned to Triodos Bank’s advisory team for help.

“We found a new building, Thorncliffe Hall, for our special school, meaning we could grow from 40 pupils to the 57 we have now,” explains Paul Walters, Head of Operations at Paces. “But the building is leased, so we couldn’t get a mortgage, and we needed £1.5 million to develop a school that was able to meet and exceed the needs of our children. Triodos helped us with an eight-year business plan and we launched a bond offer on the Triodos crowdfunding platform.” 

Breaking barriers for charity funding

“£1.5 million is absolutely our sweet spot,” says Whitni Thomas. “We can raise anywhere  from £500,000 to £10 million but most offers are in the £1 million to £4 million range, so we felt really confident in our ability to raise that amount for Paces. We helped the team to think about how many more students they would be able to accommodate and the new places they would be able to offer at the new school.”

The fees paid per pupil at the school are the main income for the charity, so the growth projections had to be correct – both in future numbers of pupils and the fees they bring.

“With the backing of the forecast we developed with Triodos, we sought to partner with all 10 of our local authorities to establish sustainable fees that met our children’s complex needs,”  says Paul Walters. "We have strong positive relationships with our Local Authorities and as a result the number of pupil places has increased with fees that match the needs of the charity.”

The crowdfunding offer was opened in June 2021 and reached its target in just 10 days. Ruth Liu remembers this as a rollercoaster time: “The speed with which the bond was filled took us all a little bit by surprise.  It was a rollercoaster of emotions, going from shock to elation and thinking wow, this is really happening, we’re going to impact so many more children, young people and families.”

Investors were offered the choice of 6% gross interest, or rates of 3% or 0% to further support the charity, an approach Triodos suggested after experience with other charity bonds. The option of receiving 3% interest was taken up by 8% of investors, which for Paul Walters was “wonderful, because people are buying into the ethos of what we’re doing, buying a stake in our future, it’s a really lovely thing to feel that people want to go above and beyond.”

Building a brighter future with impact investment

Capital projects are very demanding, but the Paces team are positive about the success of the school refurbishment and the expansion made possible by the bond.

Would they do it again? “Yes,” says Ruth Liu. “We are currently doing a feasibility study on what we can do to bridge the gap between our school and our adult services, from 16 to 25 years. For anybody contemplating raising capital in this way, the fact that we're currently thinking about doing it a second time is hopefully reassurance that it's a process that's achievable,  worthwhile, and ultimately has been so impactful to us as an organisation. Triodos gave us real confidence that we were heading in the right direction, and their advice was always reassuring and timely.”

Since starting out in capital raising in 2003, Triodos has raised £212 million in social investment through 95 offers for 57 organisations ranging from solar farms to bamboo baby products. Triodos’s support for Paces exemplifies the three themes of individual passion, banking expertise and different expectations of the future which underpin these stories of transformative impact.  

Whitni Thomas says this expertise gives Triodos something that other banks cannot provide: 

“Institutional experience matters. What really sets us apart is the work that my team does providing an advisory function that is there for the charity. We always say to the people that we work with, we will help you find the most suitable finance for you. That might be through our crowdfunding platform but if that is not suitable we will go and source funds from elsewhere. Trying to match up what is affordable for them on the best terms for them and the investors is the most important contribution we can make.”