Foundations and trusts

Charitable Bonds work by providing a combination of grant funding and capital loans.

At the request of one or more charities, Citylife may create an offer of bonds on their behalf. When the offer period closes, around 80 per cent of the total raised is loaned at a commercial rate of interest to a registered provider of social housing. The housing provider is regulated by the Tenant Services Authority, and will use the loan as part of its business to develop and maintain affordable housing. The remaining 20 per cent or so after costs is immediately given as a tax exempt grant to the charity (or charities).

After five years, the housing provider repays the loan with interest – taking the fund to its original 100 per cent level – and bondholders are repaid in full. So on an investment of £100,000 for example, around £20,000 will immediately go to charity while the rest will help to create affordable places to live.

1. Exact figure depends on commercial interest rates at time of issuing the loan.
2. Costs of issuing and marketing the East London Bond are kept as low as possible thanks to pro-bono support from a number of partners. Citylife will recover costs plus a 1 per cent issuing fee up to a limit of 5 per cent of the subscription proceeds.
3. The activities outlined in any marketing materials for the East London Bond illustrate the current funding priorities of Bromley by Bow Centre and Community Links, but grants will be spent where most needed for the benefit of the local communities.

Invest in the future of East London
The yield from the East London Bond will change the lives of people living in some of the most deprived areas of England, right on the edge of the Olympics site. It will fund two local, pioneering charities that are making a significant impact on their communities.

Programme related investment
Investing in the East London Bond will deliver social benefits from 100 per cent of your capital.

Around 20 per cent of the capital invested is given as a grant to the Bromley by Bow Centre and Community Links, which is effectively the same as if a foundation or trust gave the grant directly. However, the benefit of the Bond is that it is a combined package.

The remaining 80 per cent or so will be loaned at a commercial rate to Places for People Homes (PfPH). PfPH is a not-for-dividend registered provider of social housing, regulated by the Tenant Services Authority.

PfPH is the main asset owning company of Places for People Group, whose vision is to create neighbourhoods of choice – which means much more than just building homes. It also provides job and training opportunities, access to affordable childcare, support for businesses, financial products such as mortgages and loans, and specialist care and support services that enable people to live independently in their own home.

So by investing in the East London Bond, you can use both your grant funds and assets to meet your charitable objectives in a secure way.

Lever additional investment
The East London Bond is seeking investment from a wide range of businesses, individuals, trusts and foundations. Many of these potential investors may be more likely to invest, and to invest larger amounts, if they can see that others have already made an investment. Therefore by supporting the East London Bond your money has the potential to achieve more because of the additional finance it could lever from other investors.

Public recognition
Citylife will work with significant investors in the East London Bond to ensure that their support is publicly recognised if they so wish.

Initial investment returned in five years’ time
You will receive your principal investment at par five years from the date of issue of the East London Bond, allowing you to recycle it again for further social benefit. At this point you may choose to roll all or part of your investment into a subsequent Bond if available.

Bonds are available to purchase at a range of denominations: £1,000,000, £100,000, £10,000, £1,000, and £100. This allows investors to buy a combination of bonds for the amount they wish to invest, and after five years to reinvest some or all of the bonds in a new Bond if available, or to donate some or all of the bonds to charity. The minimum investment is £500.

Before applying to invest you should make sure you have read and understood the offer document and relevant background documents for the East London Bond.

If you wish to invest on the basis of these documents, you need to complete an application form and return this to us together with payment for the relevant amount. The bonds are officially purchased on the issue date and you will be sent bond certificates in the relevant denominations.