U.K. Charity Harnessing Debt Markets to Finance Expansion

A major British charity is planning to tap the debt market to secure about $32-million in new funding, a move the Financial Times and The Guardian say could herald a major change in financing for large nonprofits.

Scope, one of country’s biggest organizations serving the disabled, will launch a bond program this week through the Bank of New York Mellon Corporation to finance an expansion of its network of charity shops.

Richard Hawkes, Scope’s CEO, called the move a “landmark development” that gives potential donors a new avenue for supporting the group’s work and other large charities a future financing model.

“The perception of charities as organizations that go around begging for money needs to be challenged,” Mr. Hawkes said. “It’s good business practice to be doing this. Charities need to be run just like efficient businesses – businesses that are doing a social good.”