The Consortium of Voluntary Adoption Agencies and Baker Tilly have launched a £5m social impact bond which will provide loans to charities to help them increase the number of adoptions of vulnerable children in the UK.

The social impact bond, will involve 18 of CVAA’s members, and will seek to create around three hundred extra adoptions a year in the UK.

CVAA is raising around £5m of finance from investors which will be used as loans to voluntary adoption agencies, who will repay the money with interest after two years from payments made by local authorities commissioning adoption services.

Jim Clifford, head of not-for-profit advisory at Baker Tilly, who has supported the CVAA in developing this service model, said: "The social impact bond will require working capital of around £5m which is estimated will provide enough funds to tackle three hundred placements a year for hard-to-place children. Placing these vulnerable young people with families can make a real difference to their lives, from research valued at upwards of £800,000 a year. Participating in the scheme means that investors can get a sense of doing something good and life-changing with their money, whilst still achieving a return on their investment."

Clifford said interested investors have included grant-making foundations, corporate business and local authorities.