Futurebuilders has announced its first round of investments, which total more than £4.2m.

The Home Office supported scheme, which was set up on the back of recommendations in the Treasury's 2002 Cross-Cutting report, aims to provide voluntary sector organisations with the financial stability needed to secure public service contracts from local authorities, government bodies and the health service. Finance is to be provided through a variety of loans and grants.

The first round features 15 investments in total, ranging from a £1.3m package awarded to The Who Cares? Trust, a children’s charity working to secure online services for foster children, to seven £10,000 development grants that will allow organisations to establish if Futurebuilders is a viable funding option for their needs. Assessments are still being on another 200 other shortlisted applications, the results of which are expected over the next couple of months.

Speaking at the investment launch event, Richard Gutch, chief executive of the fund, said that he was pleased with the variety of the groups set to benefit, which include black minority ethnic, rural and small organisations. “A good spread is very much part of the plan,” he said. “However, our investments will become more targeted as we’ve not yet got the sort of diversity we are looking for.”

Fiona Mactaggart, charities minister, said she believed Futurebuilders would enable the sector to effectively compete with other organisations for public service delivery contracts. “I’m optimistic we can achieve this," she said. "We can then use Futurebuilders as a model to change the way we do business. We want to get funding to a stage where such initiatives are not ‘brave’ but the ‘norm’.”

The Futurebuilders website is to be revised in April in order to give more information on applying for funding as well details on investment packages available. The second round of applications opens on June 1 and closes on September 30, when around 150 organisations are expected to benefit from £70m. For more information visit www.futurebuilders-england.org.uk