Last month, we announced a Kick-Off Workshop to initiate discussions about our proposed Crowd Match Fund. The half-day workshop took place on Monday 23rd November comprising of five sessions lead by speakers from Big Society Capital, Nesta and Freedom Bakery.
On Monday this week, representatives of alternative finance platforms gathered around the table at Big Society Capital. They were here to discuss the objectives of the proposed Crowd Match Fund and contribute to the wider discussion about social investment and developments in social investment tax relief (SITR).
Ben Warren, Investment Associate at Big Society Capital, kicked off the discussions by welcoming the platforms represented in the room and setting out the day’s agenda. An energetic Melanie Mills, Big Society Capital’s Social Sector Engagement Director, then talked about how the social sector is currently accessing finance, Big Society Capital’s current work to support SITR and the opportunities presented by the tax relief more generally. She discussed the GET IT campaign, which supports several social sector organisations to access social investment and leverage SITR by linking them with professional advisors and providers in areas including PR, legal services, research, strategy and tax.
In the second session, Peter Baeck (Principal Researcher – Public and Social Innovation at Nesta) spoke about matched crowdfunding and the different ways that institutional money is currently being mixed with funding from the crowd. Touching on a range of projects – from the innovative fundraising strategies to reconstruct Hastings Pier in East Sussex, to a Dutch platform named Voordekunst using public and private funds to crowdfund cultural projects – Peter drew out potential models for match funds as well as key considerations for their design.
Simon Rowell, Strategy and Market Development Director at Big Society Capital, then presented a crisp and punchy overview of Social Investment Tax Relief (SITR) – what it is and how it is working. Big Society Capital’s Crowd Match Fund will only be available to SITR-eligible investments, which means that all potential investors (i.e. the crowd), investees (i.e. regulated social sector organisations) and the social investments themselves (which will be listed on platforms) need to be aligned with the requirements to claim SITR. Simon’s forecasts on potential capital raises and for the development of the market lead to a lot of interesting discussions amongst participants in the room.
A quick break for coffee and friendly chats was followed by Marcus Hulme (who leads on Impact Measurement at Big Society Capital) stepping up and challenging the room to define social impact. After a lively dialogue, Marcus presented our social impact approach as well as the impact requirements that would need to be tracked by projects connected to the Crowd Match Fund. We then jumped into a session with Ben Warren, who outlined the timeline and the process which will be followed until launch of the Crowd Match Fund. This included the format of the “Request for Proposals” that would be released in November and the scoring criteria for assessing the applications.
Throughout the day, we returned to questions about how this could work for frontline charities and social enterprises seeking finance. How many of them are looking for repayable finance? Does the public understand SITR? Are they willing to look to innovative solutions to help drive the uptake of SITR?
An inspirational and perceptive final session by Matt Fountain addressed some of these questions head on. Matt runs Freedom Bakery in Glasgow – a social enterprise artisan bakery that trains and employs recently released ex-offenders. Freedom Bakery recently took on SITR-eligible social investment from individual investors.
Towards the end of the session, one participant asked Matt:
“Are you a baker?”
He replied: “No, I’m not.”
“No…you don’t speak like one.” said the participant, “you speak like a seasoned businessman!”
This was followed by several other questions and thoughts, much like the others that peppered the fast-paced half-day workshop despite the early start on a grey, November morning.
The Request for Proposals seeking responses from platforms will be released next week. Click here to access the slides used in all of the presentations through the day.