Social Investment Tri borough funding fair 19 th June

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 FundsGeneral 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

For more information and contact to tri-borough commission, see

• John.gillespie@acevo.org.uk