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Anna Southall

Anna's story: 

In 2010, Barrow Cadbury Trust trustees decided to use part of the Trust’s endowment to further the aims of the Trust through investments in charities and social enterprises, with the aim of getting both a social and a financial return with the funds.  Essentially we decided to enter into the social investment space to make good social use of some of our capital.  

The Trust’s approach is to manage a ring-fenced 5% of the endowment for social investment and for that to maintain its value in real terms. Since 2010, the Trust has allocated £3.8 million to 20 different social investments, and we currently hold 15 social investments totalling £2.4 million. These include equity, bonds, loans, social impact bonds and social enterprise funds.

Our Quaker origins mean the social return is paramount. And assessing social value is our key expertise, so we are confident our skills in this area can actively contribute to the developing marketplace.

However, our aim is to have some social investments which make a decent financial return, enabling us to make others in the expectation of a lower financial return. Our approach to risk is to be prepared to take higher risks for potentially game-changing social impact. So, for example, we have invested in Fair For You despite any inherent risks because if it is successful, it will have national significance for low-income households. We believe we should take risks – that’s what philanthropic money is for – but calculated and informed risks, not foolish ones.

We recognise, and make a point of emphasising, that social investment is not always the most suitable funding solution, but is one of a range of financing options. To Barrow Cadbury Trust, the ability to make grants is crucial to achieving systemic social change. Grants, however, are a precious and limited resource and they should be protected for activities which cannot make a financial surplus. In many instances, but clearly not in all, great things can be achieved through social investment which means the money can be recycled again and again. 

Some, but by no means all, of our social investments are aligned to our programme aims in criminal justice, migration and economic justice. Examples include Bristol Together, which buys, improves and sells properties, employing ex-offenders and training them in a range of construction skills, and Street UK which provides ethical and affordable lending. Others are experimental models or reflect our value base in some other way.

What lots of organisations need is low-cost, unsecured, relatively high-risk capital.  By and large that is not currently what’s on offer out there. We want to prove by example that we can provide some of that type of finance and still, over the long-term, break even overall.

The amount of money we have for social investment is relatively small so we aim to leverage in more investment where we can, working with other investors and providing the risk capital to test models of working, which enables investees to attract later stage finance. 

Social investment will never be for everyone, but things change.  My message to trustees of other endowed foundations is to suggest that they consider periodically whether social investment might be an additional way to advance their mission.  

Read Anna's Case Study