For the last 2 years, I have been working as the Social Investment Officer here at Community Action Suffolk (CAS). CAS is the ‘go to’ for voluntary, community and social enterprise (VCSE) organisations in Suffolk. We exist to ensure our sector, and its volunteers, is supported, safe and sustainable and that our communities are active and resilient. We provide (or signpost) whatever is needed behind the scenes to enable this, so you can concentrate on doing what you do best – making Suffolk an incredible place in which to live and work.
5 learnings about social investment:
My role has involved talking to voluntary, community and social enterprise organisations across the county to ascertain whether social investment might be a suitable source of financing for them. Through this and more formal consultation with trustees coupled with conversations with social investment providers and other Connect Fund projects, I have found a few common threads:
- BUSTING MYTHS: The term is very much misunderstood; social investment will not and cannot replace more traditional funding streams and is not suitable for all, it is not a panacea for the sector. There is still a need for more understanding of certain language and concepts used in the social finance/social enterprise/social investment world. Added to this is a lack of understanding from potential traditional private sector investors of the business case as expressed by the social enterprise organisations in terms of social impact and social value.
- MATCH MAKING: One of the main challenges is perhaps a mismatch between what social investors want to invest in, the amounts involved and what the sector wants/needs financing. Whilst the situation nationally has improved with the introduction of blended finance when it comes to smaller organisations such as majority of those in Suffolk there is still more need for access to smaller amounts of investment like Mentis Tree CIC or more patient capital like Your Own Place CIC. There is undoubtedly still more to do to, particularly in the East of England to develop a market to meet the actuality of the needs of the sector and still works from a risk perspective for the social investors.
- CAPACITY: Organisational limitation and knowledge have also played a large part in the relative disengagement with social investment in Suffolk. Organisations are so busy providing impactful services to their beneficiaries they simply do not have the capacity and skills to develop entrepreneurial ideas and access market opportunities to ensure sustainability. Whilst there are some issue focused Enterprise Development programmes, essentially support structures are sparse and limited by capacity of local infrastructure organisations like Community Action Suffolk.
- RISKY BUSINESS: A lack of cultural ‘appetite’, trustees being risk averse and unwilling to take on loan finance as opposed to more traditional (and perceived as less risky) grant finance without a full understanding of what alternative models of finance could offer. This is something I really think needs to change. Risk is relative and we need more trustees to have access to peer experience, first-hand lived experience shared by other trustees and the honest rather than glossy version of what taking on investment can mean to a charity.
- POTENTIAL LIFELINE?: Nothing happens in a vacuum and it must be acknowledged that COVID-19 has had an impact on spreading the message of social investment. There is substantial evidence of need amongst the VCSE community (as demonstrated by Community Action Suffolk COVID-19 surveys among others) for support with issues of capacity and capability; business development, financial planning and investment readiness, in order to survive and thrive. Some socially beneficial services have either gone or been put at risk, and the gap between rich and poor has been amplified. For some (not all), social investment could offer a solution to bridge the gap in lost income, when vital services are at risk. Exploring every option is key. The Royal Society of Blind Children: "Rather than downsizing and cut back, we expanded our reach, cut the cost of service delivery and increased impact per pound delivered. We would not have been able to do that without the backing of the Government loan, the RRLF, and our friends at Charity Bank." Dr Tom Pey, Chief Executive, RSBC.
You as trustees have an enormous responsibility for looking at what is best for your organisations, what works for one may well not work for another. Social Investment could hold myriad of opportunities and possibilities for your organisations, leading to increased support and social impact for your beneficiaries and communities but you need to be able to understand and access these, so take the opportunity to Get Informed about social investment.