Connecting private investors with social enterprises transforming their communities

It’s been an exciting week for Social and Sustainable Capital – we are launching our first fund with £20m of commitments, which will allow us to offer substantial investment to charities and social enterprises, giving them the opportunity to increase the positive impact they are already having in their communities.

The Community Investment Fund will make loans and equity investments of £250,000 to £1m in community-based organisations that are improving the lives of local people, particularly the vulnerable and disadvantaged, providing local solutions to local needs, creating jobs and developing local economies.

As we launch the fund, we are also announcing a strategic partnership with the Social Investment Business.  We believe that by working together we will increase our ability to attract substantial commercial capital from the private sector and make substantial investments in charities and social enterprises that are creating the biggest impact in the community.

SIB is one of the UK’s leading social investors, and since 2002 they have invested over £340m in charities and social enterprises. They know how substantial investment in the right organisation can reap impressive social and economic dividends for the community it serves.

Take Burton Street Foundation, a community hub based in Sheffield which has a national reputation for supporting adults with learning and physical difficulties and also provides a range of community facilities for local residents and small businesses. When it launched a major programme to repair and save its historic buildings, SIB stepped in with a loan of over £700,000.

Now each week more than 180 adults and older children with learning and physical difficulties enjoy Burton Street’s services and activities every week, out of more than 1,500 who go there every week, to dance, to play music, sports, learn a new skill or just socialise. Fifty jobs have been safeguarded and the organisation continues to expand. Over 20 small businesses and voluntary organisations have work spaces or offices on site. SIB’s loan has helped secure the future of this vital community resource, providing jobs in construction and supporting local business in the process.

Charities and social enterprises find it hard to access finance on the scale we are offering so we believe the fund will make a huge difference. We know there’s a real appetite in UK communities to take control of the services and assets that matter most to them, and Social and Sustainable Capital’s investments will allow organisations to expand their activities, buy buildings and bid for public sector contracts.

We expect to invest around £5m a year, focusing on organisations providing health and social care, education, training and employment support, and children’s services across England. The fund is backed by SIB and Big Society Capital, who have both committed £10m.

We know there’s also an appetite among commercial investors for products that deliver both a social and a financial return. As our chairman Nat Sloane, founder of the UK’s first venture philanthropy trust, says: ‘The potential scale of private capital available to fund social investment is enormous and is important for the sector’s long-term growth.’

We aim to unlock this private capital by offering vehicles which meet investor requirements and develop their confidence in the sector. The Community Investment Fund will report on both the financial and social performance of its investments, demonstrating to investors that it is possible to make a positive impact on society and receive a financial return.

Social and Sustainable Capital is off to a great start, but the launch of this fund is just the first step, and we’re already working on exciting new projects. We want to help organisations like Burton Street, deliver scalable and sustainable solutions to social issues by giving them access to simple, but undeniably vital, finance.