Mr. D?nal Traynor:

Apologies if I repeat some things that Ms Buckley said. Awareness is key here. That is awareness among the community groups that social finance exists for that purpose and that social finance is what it is. Recent research that we carried out with DCU across the public suggests that when 50% of respondents heard the phrase "social finance", they thought it referred to grants. That in turn means that an element of investor readiness needs to be delivered across the State for these community-based organisations, which, as Ms Buckley already alluded to, are led by volunteers with 150 other priorities in their lives, as opposed to just this particular organisation and the grant that it is achieving.

When we have organisations that are being set up for charitable purposes, the last thing they ever think they will get involved in is debt. Often, we come across rules and constitutions that do not include the authority to borrow and this becomes a last-minute scramble to amend their constitution and get trustees to agree that they now have the authority to borrow. Where there are not companies limited by guarantee, there is the issue of the liability that some trustees may take on board. This is not something that either of us would like to find ourselves in, but for fraud and negligence purposes, we need to consider that.

It is linked to what I said to Deputy Ó Laoghaire earlier about community audits. These organisations need to know where they are going and what their strategic plan or the community's plan and ambition going forward is. Some thought needs to be given by the grant design teams about where finance, whether it is bridging or term loan finance, fits in. I know I and Community Finance Ireland in the Republic have never been consulted about how these grant funding programmes should be set up. It has happened in Northern Ireland. We have worked with the Department for Communities in disbursing £21 million worth of grant supports to the community and voluntary sector over the Covid period. That was a co-design process so people understand exactly where we are coming from as investors. We do not like to go in at 100% debt finance. We think it is a very prudent approach. If the community does not have skin in the game, we are on a hiding to nothing.

When we come back to the existing human capital on the ground, not necessarily just the organisations themselves but the local LEADER companies and local authorities, maybe we have to skill up there and put in extra resources whereby staff members from those entities are available to hand-hold. They need to be properly selected so they have the capacity to hand-hold these organisations and bring them through that process. We are a little different from the Western Development Commission in that organisations have the grants sorted before they come to us. We are not there to hold their hands through a grant application process. We will do so through a debt finance process but they normally come with the grants. It was raised earlier that we have an issue with the timeframe of grants being opened and closed. LEADER and SEI, are continuously open and everything is fine. Sports capital to the average sports club, however, comes out of nowhere at the last minute. Clubs have a couple of weeks to gather a committee, come up with a plan of application, put in an application, and talk to us so that they can go back to the sports capital section in the Department and say they have spoken to a finance provider and say that, in principle, they can get access to bridging finance or term loan finance, and then we wait. We could be waiting for six or seven months. This perhaps comes down to a lack of resources in the sports capital team too for it to complete its assessments. Six or seven months later is a long time in this business. Costs escalate. One comes back to the same organisation that said yes, in principle, six or seven months ago, but the whole game has changed and we have to go through the due diligence process a second time, which takes the resources from us and the community into consideration.

On the work that we do, I am not speaking for the Western Development Commission but I am sure it comes across the same thing as us. Probably about 70% of the advocacy, signposting and due diligence work that we do with community-based organisations comes to nothing. Only about 30% of them end up drawing the loan finance. We are not grant-funded so our whole staffing team is covered by the interest income that we get from the circa 30% of loans that actually draw down. We now have to think about what we can do for the other 70% and how we can make sure that it is worthwhile that they engage with us in the first instance.