Social InvestmentTri borough funding fair 19th June
John Gillespie, ACEVO
Diagrams thanks to Big Society Capital
What is social investment?
It IS:the provision of finance to generate social and
financial returns
It is NOT:a grant – there is an expectation of repayment of the
finance, plus a return
Why is social investment beneficial?
• Fills financing gap for innovation and growth, increasing impact.
• Strengthens governance and accountability
• Brings in new groups of supporters, and their skills and experience
• Capital is recycled for onward investment
• Deeper engagement with social sector and community
• Helps shape a new responsible form of capitalism
For INVESTEES For INVESTORS
Why social investment?
Access to finance for small and medium
sized charities – on a par with private
businesses
Broadening investor options to invest in
socially useful activity – “twin bottom line”
Capital to scale innovative approaches
to tackling social problems
Support preventative/ invest to save
approaches
Different uses
Working capital – aka “overdraft”
Capital purchase – building or equipmentaka mortgage/ hire purchase
Development/ growth capitalaka student loan/ career development loan
£109m £72m
The Social Investment Market
Wider social investment ecosystem
OCS Social Incubator
Fund(£10m)
Big Venture Challenge (>£5m)
CO ICRF (£10m)
Stage of business growth
Commissioning/revenue support
Secured Loans
Unsecured Loans
Equity
Grant
Restricted Grant
Social Investment Funds (~£20m)
Start up Early GrowthEstablished
Type
of c
apita
l
BIG Potential(£10m)
CO Outcomes Fund (£10m)
BLF Outcomes Fund (£40m)
Fully or partly funded by government
Fully or partly funded by Big Lottery Fund
Partly capitalised by Big Society Capital
Other
Grant programmes from Charitable Trusts and Foundations (>£2bn)
Social Banks (~£180m)
Tech for Good
(£500K)
Social Investment Finance Intermediaries
Social Funds
General funds
Specialised funds
Social Lenders
Social Impact Partnerships
Investment Readiness
ResultsFund
Social Investment Market CIC
SocialIncubator
Fund
Improving sustainability - Greenway Centre
“Installing solar panels has enabled us to reduce our operating costs, so our services remain affordable for the whole community”
‘hire purchase’ a mini-bus
CAF Venturesome helped a small charity with next to no reserves purchase a mini-bus. Loan paid back over 2-5 years.
SIB Model: To reduce loneliness and isolation amongst older people (in development by Social Finance)
Investment in services to reduce loneliness – benefits of reduced service use and improved health outcomes
Reduced loneliness
SIB SPV
Investment into SIB programme
Payments represent a % of cost savingsInvestors Commissioner
(eg LA)
Delivery programme (could include peer support, group activity, CBT for most isolated)
Lead delivery charity
Payment metric:Reduction in loneliness
- Pressing social need
- Engaged commissioner
- Complex social outcome to evidence
Tri-borough Commission on Social Investment “the local opportunity”
• Currently taking evidence• Report and recommendations due in August
– How to develop the local ecology? – How to increase supply of investment available to
local organisations– Perhaps working with local foundations to develop a
local fund for tri-borough– Raising money from high net worth individuals ‘crowd
funding’
Is social investment right for us?
…… Not a replacement for grants or other income..• Do you have an income stream?• What level of repayments can you afford?• Be clear about what you need it for –
working capital, capital purchase, growth capital
• Can you evidence social impact? • What is your appetite for risk (including
that of trustees)
Some sources of support
• Community Assets and Services Grants – up to £10k (pre-feasibility) and £100k (feasibility) - for any org that is looking to deliver a public service
• Big Potential – up to about £100k for any org that is looking to borrow up to £500k