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Ethex - making investing into projects with a social purpose easy to understand and do

Georgina Matthews is communications executive at Ethex, a platform that enables individuals to invest money directly into organisations they care about.

We talked to Georgina about how the Ethex model for 'positive investment' can help raise funds for projects with a social purpose.

Why should charities, community groups and social entrepreneurs be excited about crowdfunding?

Through social investment platforms like Ethex, investors can put their money into businesses they believe in and these positive businesses can then find the funding they need to develop and grow. It means people can save and invest in a way that benefits society and finances a more sustainable world. We want positive investing to become mainstream.

Why was your platform set up and what are you hoping to achieve?

Ethex was set up three years ago by social entrepreneur Jamie Hartzell to finance a better and more sustainable world. His vision was to transform the current financial system and make truly ethical, or positive, investment accessible to all, while also building a movement of positive investors in the UK. Shorthand for “ethical exchange”, Ethex is a positive investment and savings platform that makes it easy to make money do good.

How can your platform help people or organisations interested in fundraising for a good cause?

Ethex has lists of share and bond offers from community benefit societies (BenComs), co-ops, charities, and social enterprises looking to raise finance from retail investors. These could be organisations looking to finance a new organic farm shop, start a community energy scheme or build affordable housing.

Could you give an example of what a typical Ethex project looks like?

South Staffordshire Community Energy (SSCE) recently launched a share offer (now closed) on Ethex to save lives with solar energy. This is how it works: SSCE will install solar panels on the roof of the local hospital with investment from local people. The hospital reduces its long-term energy costs, which can then be invested in improved hospital services.

The income from the solar panels from the Government Feed-in-Tariff is used to pay back investors, at 4.5% IRR over the 20-year lifetime of the project, and any surplus is invested in a community fund. In turn, this fund supports the work of national charity Beat the Cold to improve the welfare of local residents living in fuel poverty. Et voila, the cycle is broken. That’s positive investment for you!

SSCE has currently raised 79% of their £335,600 target with two weeks to go!

Are there any unique features of your platform we should know about?

Ethex brings together on one platform the best positive investment and savings products. We list businesses that have a clear social and/or environmental mission at their heart and work in areas like renewable energy, fair trade, social housing, organic farming or microfinance.

If you could give three tips to someone using crowdfunding for a good cause what would they be?

I have four:

  1. Crowdfunding can turn great ideas into reality. You can raise finance for your project, as well as awareness and support.

  2. Ensure that the 'good cause' is right for investment and that others buy into your vision and story. The financial returns and the social/environmental returns must be clear to investors.

  3. Make sure your target is realistic and a balance between what you need to raise and what you can expect to raise from your audience.

  4. Get support for what you’re doing and plan a good marketing campaign!

You can learn more about Ethex and the type of projects it helps fundraise for at www.ethex.org.uk.

Read the other interviews with crowdfunding platforms.

Photo Credit: (c) Ethex

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Jonathan Bone

Jonathan Bone

Jonathan Bone

Senior Researcher, New Technology and Startups

Jonathan is a senior researcher in the New Technology and Startups team.

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Peter Baeck

Peter Baeck

Peter Baeck

Head of Collaborative Economy Research

Peter focuses on the collaborative economy, crowdfunding, P2P lending and the role of digital technolgies in public and social innovation. Peter lead much of Nesta's research into cr...

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