UK charities among those eligible to apply for loans and investment from world's largest philanthropic trust

The Bill & Melinda Gates Foundation has launched a $400m (£252m) social investment fund that will provide loan financing, underwriting and equity investments for not-for-profit organisations and businesses with a social purpose.

The foundation, the world's largest philanthropic trust, said it wanted to maximise the effectiveness of its money in the light of a reduction in the value of equity markets, which is thought to have reduced the value of its endowment by about 20 per cent.

"We're also working with a range of partners," a spokeswoman for the charity said. "We hope to leverage our investment by attracting others to invest alongside us.

 "Traditionally, we've given money away in grants, so this is a change in our behaviour."

She said any investments made would be in areas that supported the foundation's goals, including investing in businesses and charities providing health and development services, and offering support to small businesses in the developing world. UK charities will be eligible to receive money from the programme.

The foundation would run a two-to-three-year pilot, after which time it might expand the amount of money available for social investment, she said.

It expects to make investments only of $2m or more, and has said it anticipates the first one to be made by the end of the year.