Modernisation Fund

This fund is now closed for new applications. The Modernisation Fund provides interest-free loans of between £30,000 and £500,000 to help organisations be more resilient to the impact of the economic downturn.

This fund is now closed for new applications. All investments offered must be drawn down by 31 March 2010.

The Modernisation Fund helps third sector organisations be more resilient to the impact of the economic downturn. It is aimed at helping organisations that are providing services which are particularly in demand during a recession. It was launched as a key part of the Government?s action plan for the third sector, ?Real Help for Communities: Volunteers, Charities and Social Enterprises?.

We want to help you to plan for difficult times ahead, identify issues and opportunities and take action to ensure you are best able to prosper in the coming years. In many cases this means working in collaboration with other organisations or merging together. It can also include looking at how you can improve processes and skills for the future.

You can apply for Investments ranging in size from £30,000 to £500,000. The largest part of every investment will always be a loan, but there is also some grant money available. Loans are provided interest-free for five years.

Eligibility criteria

• You must be a third sector organisation delivering services to people or communities that are affected by the recession
• You must not be able to raise funds commercially
• You must be willing and able to take on a loan
• The money must be for immediate need and fully drawn down by the end of the 2009/10 fiscal year
• Your services must benefit people living in England ? priority is given to those serving people in deprived areas
• You must use the investment to ensure your organisation becomes stronger and more sustainable by either changing your structure, processes and delivery models or working with other organisations to deliver more and better services
• You must have a solvent business when you apply to us

What can you use Modernisation Fund investments for?

You can use the investment to meet costs related to preparing for the difficult times ahead. We do not prescribe a list of items you could spend the money on, but we think that some of the items applicants are likely to apply for include:

• Collaborating with other third sector organisations to deliver services or other collaboration aimed to increase efficiency
• The cost of merging with other organisations
• Recruiting new staff ? for example to improve financial systems and skills or to meet increased demand for services
• Introducing new processes and systems
• Retraining and upskilling existing staff

We think a typical applicant for this fund could be an organisation that has looked at its base costs and skills and identified ways in which it can operate better. This could be through reducing costs or taking advantage of increased demand. For example, we expect there to be more call for financial and legal advice, employment services, family support etc.

The fund is not intended to support struggling organisations who are not making necessary ? even if hard ? decisions on preparing for the future. To obtain any sort of support you will need to show a real commitment to change and future growth.

How to apply

There is no application form for this fund. If you want to find out more or apply for an investment:

• Submit an enquiry (please note that applications for Futurebuilders have now closed so no furthur enquiries will be accepted)
• Call 0191 269 2277
• Send an email to [email protected]

More information can be found on the Modernisation Fund website.

What we need from you

We will assess your application mainly by phone, although we may arrange to come and meet you if necessary.

In all cases, we will ask you to:

• Be available to discuss the application on the phone
• Provide historic financial information quickly (annual accounts and up to date management accounts)
• Provide a breakdown of the costs the investment is needed to cover and a plan that shows what you want to do, when and why this will make you stronger
• Provide contact details for your existing or potential purchasers, if appropriate
• Explain how your organisation is constituted and confirm that it is willing and able to take on a loan
• Explain how you meet our criteria and fit our priorities ? particularly how you will provide services for people affected by the recession
• Explain why you need investment and what costs you need it to cover
• Explain how you plan to repay the loan

Please let us know if you have access requirements that might affect how you apply to the fund.