Impact on Organisations

Impact on organisations

Social investment is a tool available to charities and social enterprises to build and grow their organisations.

We have aimed to build and share understanding of the use of repayable finance, as well as developing new products with partners that better address social need.  In this section, we review the progress that has been made and the challenges that remain.

3,500+
outstanding investments into charities and social enterprises

87%
of social investment was raised by charities and social enterprises outside of London

82%
of charities and social enterprises said their understanding of social investment had improved in the past 2 years

21,000
number of unique users of our Outcomes Matrix

Ben Allen, CEO and Founder, Oomph!

"Social investment has taken Oomph! from a small business in Scarborough to a national business. We now help people from the Shetland Isles all the way down to Brighton and pretty much every town in between. We are now a national business looking at international opportunities. We would still be in Scarborough without the social investment."

What can social investment enable you to do?

We have worked with co-investors and intermediaries to enable demand for social investment to better meet supply.

  • 3,500+ charities and social enterprises have raised social investment
  • £467 million of our capital has reached charities and social enterprises, of which £325 million came from our co-investors
  • 4 Growth Funds totalling £19.2 million were launched by Access to provide combined loans and grants targeting smaller charities and social enterprises

Social investment is often perceived as being irrelevant for all but the largest organisations, and we will continue to promote awareness of the options now available and being used by smaller organisations. The numbers only tell a small part of the story. What excites us most is the different ways that charities and social enterprises, kareg and small, are using social investment to build and grow their organisations. 

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Social investment is available for charities and social enterprises throughout the UK to improve people's lives.

  • 87% of social investment was raised by charities and social enterprises outside of London
  • 71% of charities and social enterprises using social investment work in the 50% most deprived areas of the country
  • More than 300 people attended nine regional Let’s Talk Good Finance events
  • Homeless Link has recently launched the first social investment fund managed by a membership charity with investment from the Growth Fund, developed out of our partnership to raise awareness of social investment with homeless charities

We have supported the creation of regional funds such as NESIF and Key Fund, and worked with local government and the social sector in areas such as Newcastle.

There are still parts of the UK where there has been little uptake of social investment (for example the East of England) and we continue to support awareness raising work where there is appetite. 

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We have reached out to charities and social enterprises to increase awareness, knowledge and confidence in repayable finance.

  • 82% said their understanding of social investment had improved in the past 2 years
  • 63% of co-investors said Big Society Capital played a role in their decision to invest
  • £60 million capacity building support were made available via Access’ Reach Fund

We have launched nationwide initiatives such as the Get SITR and Get Informed campaigns and Good Finance to help stakeholders understand how social investment could be relevant to them. Despite sources of support, capacity for many charities and social enterprise leaders to be able to explore social investment, and to develop sustainable revenue models remains a very real challenge.

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We have taken a leadership role in promoting enhanced standards and principles of impact management so that organisations can better understand how their activities create positive change.

There are capacity challenges at the front line and intermediary level in collecting and reporting on impact, and there is a tension between not being prescriptive in reporting requirements, and being able to collect information which enables us to draw out lessons across our portfolio. We will continue to support charities and social enterprises to measure, deliver and manage their impact, communicating examples through our blogs, case studies, and transparency data. 

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Social investment can be used in different ways to build and grow charities and social enterprises

Social investment can enable charities and social enterprises to try new approaches and find investors who are prepared to share the risk of piloting a new service.

Family Action has developed Safe Haven, an innovative intervention designed to improve outcomes for vulnerable young people in care. The service is delivered based on a commissioned payment by results service where the local authorities of Sandwell and Wolverhampton make payments to Family Action when defined social outcomes are met. Social and Sustainable Capital structured a £700k investment on a risk-sharing basis for Family Action to pilot the untested service model.

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Social investment can be used to accelerate the growth of early stage social ventures.

Unforgettable is a social venture that provides products and community supports to people living with dementia and those that care for them. The venture was incubated and seed funded by social investors such as Bridges Impact Foundation and Impact Ventures UK, providing office space and mentoring alongside equity investment. Early-stage capital has enabled Unforgettable to accelerate its growth, attracting almost one million site visitors in 2016. Bridges Fund Management and IVUK provided follow-on investment with McKesson Ventures (the venture capital arm of the oldest and largest healthcare company in the US) to fund Unforgettable’s international expansion. 

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Social investment can be used to help organisations significantly grow their impact.

Oomph! is a social enterprise that provides specialist exercise classes from older people. It started with support from the Big Venture Challenge and has now grown its services with social investment to reach 1,000 care homes and residential settings across the UK. The organisation is continually developing and has recently received additional investment from Nesta and the Care & Wellbeing Fund to run a new transport services so older people can get out and about.

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Homelessness charity St Mungo’s launched the £30 million National Homelessness Property Fund in partnership with Resonance to acquire residential property which will be let to individual and families who have been homeless, or are at risk of homelessness. The Fund replicates nationally the formula that Resonance and St Mungo’s have successfully used for three years in London with the Real Lettings Property Fund (RLPF), which raised investment of £57 million. The RLPF have a portfolio of almost 300 properties in London, helping around 1,000 people who faced homelessness.

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Social investment can help organisations to diversify their income streams and become more sustainable. 

Direct Help & Advice (DHA) is a charity that provides free legal housing and debt advice to help prevent homelessness. During a critical period when DHA’s cashflow dropped to a level where their bank refused to increase it, Key Fund provided them with a £45k loan to adapt and survive. With Key Fund’s support, DHA has diversified from being a charity reliant on grants, to a sustainable business with a £1 million turnover. 

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Charities and social enterprises can become a social investor or social investment intermediary to provide repayable finance to sectors and regions where funding gaps are identified. They bring valuable expertise on specific social issues, interventions and of the sector which can help shape how investment is used.

Macmillan Cancer Support and Big Society Capital launched the £12 million Care and Wellbeing Fund to develop and scale community care services for people affected by cancer and other long-term conditions. This is the first time a large charity has invested in a social investment fund that is in line with the charity’s objectives.

Homeless Link, a network umbrella body for homelessness voluntary, community and social enterprise organisations, has recently launched its Social Investment Fund with support from Access to provide small-scale loans for its members. Once launched, Homeless Link will be the UK’s first charity-led social investment intermediary.

Learning

Our efforts should begin and end with social impact and repayable finance should be seen as simply the tool that can support it. Charities and social enterprises care deeply about the people they wish to serve and less about complex products and structures. It is important to firstly engage with them on social issues and then work out how repayable finance can help.

The main challenge for most charities and social enterprises considering social investment is “who pays” for the service or activity. We’ll continue to share the practical learnings around revenue models which social investment can help support.

It is important to understand the stakeholder’s motivations, resources, expectations, capacity and objectives. This applies to both investors and charities and social enterprises.

For charities and social enterprises unfamiliar with investment, the language and processes of taking on repayable finance can be confusing. Efforts such as Good Finance will help but there is still work to be done. It is important to be clear that repayable finance is not right for everyone.

Many components are needed to make repayable finance work well and create social impact. Our partners include co-investors, social fund managers, infrastructure bodies, arrangers, foundations, experts and networks are all a critical part of the ecology for repayable finance. They are all important stakeholders in ensuring social investment works well.

The process of working with social fund managers has helped charities and social enterprises to build their capacity, capability and sustainability.