The Commission said suitable capital should be made available for organisations at all stages, from charities without trading revenue to social enterprises. A social investment bank would be able to offer this service to the “under-capitalised third sector”.

The Commission claimed that the bank – which should be independent and answerable to the sector - would need founding capital of £250 million, and an annual income stream of £20 million for a minimum of four years.

Based within existing institutions, it would undertake four initial activities: filling gaps in the marketplace where a lack of capital is restricting social impact; offering advice and providing higher risk investment; offering programmes of sustained investment in specific markets (such as community regeneration and financial inclusion); and supporting existing and new intermediaries to raise private capital.

The bank, it added, should be “small adaptable, innovative and able to take risks. It should bring together the best of the financial and social sectors”.

Stuart Etherington, chief executive of NCVO, said he was pleased the proposed bank would operate through existing intermediaries, and should be guided by independence, sustainability, responsiveness and a policy of reunification, so people are able to re-claim their assets at a later date.

“While social investment is increasingly important, there is a need to remember that different funding tools are needed by different organisations for different activities,” Etherington said. “In particular, the funds from dormant accounts should be used to support a small grants programme and programme-specific initiatives, as well as providing equity finance through the social investment bank.”

Social Enterprise Coalition chief executive Jonathan Bland also welcomed the proposal. “Money is the motor of all business growth and it is essential that social enterprises get the capital they need to successfully trade for community benefit,” he said. “Tens of thousands of social enterprises are currently using their business profits to reinvigorate local communities and address environmental problems, and this bank will create a sustainable system of finance for these businesses to grow in size and number.”

Futurebuilders chief executive Richard Glutch said he was pleased the report recognised that the need for capital investment should be accompanied by tailored support and advice. “Overall we particularly welcome a new institution which uses the experience and expertise of existing social investment organisations, whilst retaining the independence to be extremely innovative and the potential to take risks,” he added.

The Commission on Unclaimed Assets report was published as the Balance Foundation, a charity which releases unclaimed assets from the financial sector, announced it is to be wound up with the administration of its existing grants programme to be taken over by the Clore Duffield Foundation. It has released £8 million in unclaimed assets for good causes since its creation in December 2003.

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