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