Good deals 2009
THE SOCIAL INVESTMENT ALMANACK

Good deals 2009
The Social Investment Almanack
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Welcome to Good Deals 2009:
The Social Investment Almanack
Produced by the Social Enterprise team:
Editor: Tim West
Deputy editor: Chrisanthi Giotis
Commissioning editor: Julie Pybus
Art director: Carsten Glock
Design and illustrations: Syd Hausmann,
Ivan Lee, Sofia Sköld, Sarah Blick
Marketing: Deniz Hassan, The team at Social Enterprise started threads – between large and small together with feature profiles
Katharina Fischer, Matt Black working on this Almanack after organisations, between supply and and alphabetical listings of names
Thanks to our advisory panel: Nandini
the first UK social investment demand. Chapter one, for example, and contact details, providing a
Munnien and Dan Gregory at the Office conference, Good Deals 2008. The offers two very different examples useful index of a range organisations
of the Third Sector in the Cabinet sell-out event, being repeated in of social investment: that which involved in the supply, support
Office, and Sarah McGeehan at NESTA October 2009, showed us there was comes from the power of many and debate around this market.
a huge appetite from both social ordinary people clubbing together; Arguably, social investment
enterprises and investors to learn and that created by powerful has emerged because what we
about social investment. financial institutions. tend to call the ‘mainstream’
This excited us. We believe Each chapter includes snapshots forms of finance – whether grants,
social investment can be used to of social investment in practice philanthropy, or traditional
tackle the big problems humanity (labelled with the in practice icon ). lending and investment – are
faces and it is our job to shed light The perspectives, which failing to or incapable of providing
on this developing market. punctuate the main chapters, tap the financial resources required
We found like-minded partners into the expertise of some of the by enterprises addressing social
in the Office of the Third Sector most forward-thinking people and environmental problems. This
Printed by: GPS Colour Graphics
and the National Endowment in this arena, applying the tools of publication reflects our belief that
Published by London Fields Publishing, for Science Technology and the social innovation to areas such as the solutions can be devised, both
publishers of Social Enterprise magazine, Arts (NESTA) – et voilà – the global financial crisis and how we by those with money and those
a joint venture between Society Media Almanack was born. might think differently about what seeking it, and the more people
and Glock
As a UK publication focused ‘investment’, ‘value’ and ‘returns’ interested and involved the better.
www.socialenterpriselive.com
Text printed on recycled paper made from solely on social investment it is the might mean. The social investment
© London Fields Publishing Ltd 2009 100% post consumer waste, using soya based first of its kind. The four chapters Our original illustrations have community is important. It is
inks. Cover printed on 50% recycled board introduce the social investment been commissioned from a team important that it grows. We hope
ISBN: 978-0-9562274-3-0
marketplace and run through of talented artists and designers this publication will help bring
No part of this publication may be models that are well established, to show the history of social together powerful partnerships
reproduced in any material form without the just taking off and those that are in investment, its landscape and and inspire more people to become
written permission of the copyright owner the laboratory stage. the community that exists. Our part of this world.
except in accordance with the provisions Throughout, we draw out directory – the back section of the
of the Copyright, Designs and Patents Act
contrasts but also identify common Almanack – brings this community THE SOCIAL ENTErprISE TEAM
1988 or under terms of a licence issued by
the Copyright Licensing Agency Ltd, 6-10
Kirby Street, London, England EC1N 8TS
Good Deals 2009: The Social Investment Almanack 5

6 The Social Investment Community Good Deals 2009: The Social Investment Almanack 7

Contents
Contents
WELCOME pEOpLE pOWEr CHApTEr TWO SErVICES ON DEMAND
When individuals join forces financially, SOCIAL INVESTMENT: When their services are threatened,
005 — The Social Enterprise team welcomes they can make a real difference ESTAbLISHED MODELS the citizens of the uK have a strong
you to the Almanack history of sorting things out themselves
028 — ShArIng ThE poTEnTIAl for good 050 — INTrODUCTION
006 — Illustration: the social investment Cafédirect’s public share issue A springboard to the future 062 — STAyIng AlIvE
community The proof that social investment can Across the uK villages have banded
032 — TorrS hydro and does work together to save their village shops
012 — The Almanack team: meet our talented how a community funded its own hydro-
writers, editors and designers electric plant THE prOVEN pIONEErS 066 — glAS Cymru
A variety of organisations are well The 1.3m customers of this utility
034 — SundErlAnd homE CArE practised in social investment company have received annual
FOrEWOrD ASSoCIATES dividends since it was taken over
Employees have shares in their 052 — rElATIonShIpS ThAT lAST from its American owners by staff
015 — Angela Smith, minister for the third own company at Sunderland home Care Some charitable trusts, ethical banks
sector, explains the government’s Associates and specialist community organisations 068 — EnErgy4All
support for social investment have been offering investment finance This organisation helps
THE GOOD AND THE GrEAT to third sector organisations for several communities finance and develop
Established institutions and social decades their own green energy
prELUDE investment
GETTING yOUr bEArINGS 058 — fuTurEbuIldErS EnglAnd 070 — pErSpECTIVE
036 — SEEIng IS bElIEvIng one of the uK’s biggest social investors
An elephant called investment
018 — The social investment timeline deutsche bank Americas has its own is supported by the uK government
readiness
foundation combining social impact with
Sarah mcgeehan says we have
022 — World map: navigating the social financial return 060 — rbS CommunITy bAnKIng
made many strides but there are
investment landscape This mainstream bank is keen to invest
more tools needed
040 — CClA in its communities
An investment manager that is placing
CHApTEr ONE funds in a microfinance product to
074 — pErSpECTIVE
A NEW FINANCIAL LANDSCApE help people in poverty across the world
A totally Lush way of doing business
026 — INTrODUCTION 042 — CAjA lAborAl lush founder mark Constantine
From Bangladesh to Canary Wharf how one of Spain’s largest business groups explains how his ethical business
What’s going on today with social was financed by the workers’ own bank functions financially
investment across the world
044 — pErSpECTIVE
p058
Turning away from casino capitalism
microfinance pioneer muhammad yunus
says it’s time for capitalism to change
8 Chapter three: Emerging investment models
Contents Good Deals 2009: The Social Investment Almanack 9

Contents
CHApTEr THrEE EQUITy FOr EQUALITy CHApTEr FOUr DIrECTOry
EMErGING INVESTMENT many social enterprises find it difficult ExpLOrATION THE SOCIAL INVESTMENT
MODELS to get their hands on funding, but AND ExpErIMENTATION DIrECTOry
investors are beginning to see the A wide ranging index of profiles and
080 — INTrODUCTION potential of this market listings of organisations in the social
110 — INTrODUCTION
Shiny and new investment marketplace
Social finance futures
The exciting initiatives in social 090 — vEnTurIng InTo SoCIAl ACTIon
big ideas and a healthy dose of risk – the
investment right now Sir ronald Cohen talks about providing 134 — dIrECTory profIlES
tools needed for new ways to change
social enterprises with the equity they
the world. Take a peek at the future
pHILANTHrOCApITALISM need to grow 147 — dIrECTory lISTIngS
The richest people in the world are finding
112 — A brIghTEr form of bAnKIng
new ways to do good with their money 096 — moTIv
A social investment wholesale
This social enterprise secured a loan, AppENDIx
bank could make us fall in love with
082 — phIlAnThropy 2.0 a grant and business support to extend jArGON-bUSTEr
banking again
The wealthy are investing in good its work with young people 166 — definitions and explanations of key
causes while they are alive rather than terms and phrases
116 — ThE EnTErprISE, ThE InvESTor
donating when they are dead 098 — ChArITy buSInESS
And ThE ExChAngE
venture capital was just what this
The pros and cons of a social stock
086 — rEd buTTon dESIgn social enterprise needed to move to its
exchange
A company supported by the millionaire next phase of development
investors of the dragons’ den to
120 — buIldIng bondS for A bETTEr
produce innovative technology for the 100 — pErSpECTIVE
SoCIETy
developing world
Impact, value and social return on how social impact bonds could save
investment taxpayers’ money and bring financial
088 — brIghT IdEAS TruST
jeremy nicholls discusses how to returns to investors
Entrepreneur Tim Campbell’s charity
account for social impact
which supports up and coming young
126 — monEy mAKES IT round ThE World p116
business people
how microfinance institutions are
getting involved in remittances – the
104 — pErSpECTIVE money sent home by migrant workers
A market for giving
130 — pErSpECTIVE
Ideas from Arthur Wood and
maximilian martin for getting a better The mature approach to a crisis
flow between those who want to give Social enterprises must prepare
and those who want to receive themselves for a bigger and
more serious role in the post-credit-
crunch society
p088 p126
10 Chapter three: Emerging investment models
Contents Good Deals 2009: The Social Investment Almanack 11

The Almanack team sector for five years and enjoys
setting up partnerships.
Julie Pybus
Julie, who did
much of the
Caspar van Vark
Caspar, who
wrote the People
syd Hausmann commissioning Power articles
Syd, who created and copy in chapter
our Social editing for one, has been
Investment the Almanack, is consultant a freelance writer and editor
Community editor for Social Enterprise. since 2002, specialising in
Ian allsop and social issues. She regularly bestseller The World in a Phrase: illustration She specialises in editing and charities and social enterprise.
Ian, who contributes to national publications, A Brief History of the Aphorism (page 6), graduated from Central writing for third sector-focused He contributes to The Guardian,
interviewed Sir including The Guardian. Saint Martins College of Art publications. Her work has also Third Sector, and Social Enterprise
Ronald Cohen Chrisanthi Giotis and Design in 2005. She has a appeared in The Guardian and on topics ranging from fundraising
(page 90) is nicola Carroll Chrisanthi is assistant editor passion for illustration, typography, The Observer, and she is a former to Fairtrade.
a freelance Nicola, who writes about village (print) of Social Enterprise. She travel and social enterprise. editor of Third Sector magazine.
journalist specialising in finance shops in chapter two, has 15 particulary enjoys writing on She has lived and worked Flemmich Webb
and the not-for-profit sector. Until years experience as a journalist social finance and has reported in America, Holland, Germany sofia sköld Flemmich, who writes about the
he stepped down in February 2009, specialising in social issues. Her in print and on radio for 10 years. and Russia. Sofia, who drew our social Social Stock Exchange in chapter
he was editor of Charity Finance passion for social enterprise was investment globe on page 22 and four, is an experienced freelance
for five years and author of the whetted during a Masters degree Carsten Glock Ivan lee created the original artwork in environmental, social media and
magazine’s highly regarded annual at Manchester University and she Carsten is art director of Social Ivan, who chapter four, decided to work travel journalist. His articles have
survey of fund management. has written extensively on the topic Enterprise. He oversees all created our within art/design at the age of appeared in The Guardian, the
since. She is particularly interested printed and online designs and timeline on page eight. She later moved to the UK Daily Mail, The Business Post and
Matt Black in rural community enterprise. ensures everything we create 18, graduated from Sweden to study at Central CNBC European Business among
Matt, who worked on the Almanack looks fresh and exciting and uses from Duncan Saint Martins College of Art others. He has also worked in radio
adverts, has a wealth of experience Katharina Fischer effective design to get across our of Jordanstone College of Art & Design where she graduated for BBC London.
in social enterprises, starting in Katharina organised Good Deals important stories. & Design. His passion for in 2007. She has a particular
South Africa. Since returning to the 2008 and carried out research for typography has seen him become interest in experimental and tim West
UK he has worked on commercial this publication. She works in the Gemma Hampson a member of the International contemporary visual language Tim launched
partnerships for a number of third Social Enterprise marketing team. Gemma, who Society of Typographic Designers within social sector publications. Social Enterprise
sector organisations. wrote our profile where he achieved a merit for magazine in
James Geary of Muhammad his submission. louise tickle 2002 as editor.
Claudia Cahalane James, who wrote Yunus, started Louise, who has profiled some He has worked
Claudia, who our philanthro- her career on one Henry Palmer of our established pioneers on a range of publications and
interviewed David capitalism of the UK’s largest weekly papers Henry is contributing editor of in chapter two, is a freelance strategies that communicate
Robinson for our feature, is and is now assistant editor (online) Social Enterprise and co-founder of journalist based near Bristol. both social and entrepreneurial
piece on social executive editor of for Social Enterprise. communications agency Society She specialises in social affairs, value. A newspaper journalist,
impact bonds, is Ode, a magazine about positive Media. He has successfully international development he held a series of senior editorial
a magazine and online journalist change, and a regular contributor to deniz Hassan broken stories to the national and education for publications roles in national trade media,
who has spent the last eight years Popular Science. He is former editor Deniz is the marketing manager media about social issues and is an including The Guardian, the TES, before setting up communications
covering the environmental of the European edition of Time for Social Enterprise. He has award-winning writer in the field Community Care and DFID’s agency Society Media with
business sector, as well as ethical and author of the New York Times specialised in marketing to the third of community finance. Developments magazine. Henry Palmer.
12 Our contributors Good Deals 2009: The Social Investment Almanack 13

nesta, ClG and ots present: HIGHlIGHts
antony Bugg-levine,
managing director of
the Rockefeller Foundation
david Blood, former CEO
Foreword
of Goldman Sachs Asset
Management and non-exec By illuminating the current social investment
director of Social Finance landscape, established models and emerging initiatives,
the Almanack will plot the development of new
antony ross, executive
director of Bridges Ventures approaches to financing social change and, I hope, help
facilitate the growth of social enterprise.
James Bevan, CIO at CCLA Across government, there is a shared belief
Good deals
liam Black, founder that social enterprise and the third sector can
of Wavelength play a significant role in overcoming some of the
toby eccles, director most entrenched problems of society, and there is
of Social Finance increasing recognition that access to appropriate
2009
finance and funding is essential in enabling this.
Jonathan Jenkins, director The current economic climate raises both great
of ventures at UnLtd Ventures
challenges and also great opportunities for social
daniel Brewer, director enterprise and the third sector. The contribution of
of Equity Plus There is an opportunity social enterprise is ever more important. Deprived
here for a new culture communities will need more help and environmental
tHe natIonal soCIal
Government ministers
considerations need more emphasis.
of investment inspired People are increasingly looking to buy from
tHe MarKetPlaCe
InVestMent ConFerenCe Where hundreds of
entrepreneurs and investors
by social enterprises and invest in businesses with strong social and
environmental purposes. There is an opportunity
meet face to face here for a new culture of investment inspired by a new
Building on the sell-out success tHe Gd MasterClasses It is my pleasure to introduce Good Deals 2009:
generation of social enterprises.
Practical, in-depth I am committed to helping the third sector thrive
of last year, Good Deals 2009 breakouts for both investors
The Social Investment Almanack, an unprecedented
and become sustainable. I believe there is an important
is back with one bold mission: and investees collection of think pieces and case studies that aims
role here for government to step in where the market
to build knowledge and inspiration among those
to bring together the most MeasurInG IMPaCt operating in the social investment space as well as those
fails: meeting gaps in the provision of capital, building
Understand and communicate demand and developing links in the market – between
inspiring social entrepreneurs your impact (the ultimate must
looking in with curiosity from the outside.
investors and the third sector.
with the most innovative for investors and investees) This publication follows the first UK social
I am particularly pleased that we have recently
investment conference Good Deals 2008, which was
investors to get good deals done Delivered by sponsored by Office of the Third Sector last year
launched a consultation of the design and functions of a
Social Investment Wholesale Bank – a bank which would
and reinforces the UK government’s pioneering
help increase investment in society, the environment
29 october 2009 position at the forefront of social investment globally.
and the economy at the same time, delivering against
Social investment comes in many forms. Yet
British library, london In partnership with there is an emerging general consensus as to its main
a ‘triple bottom line’ of greater economic growth,
social cohesion and sustainable development.
purpose: this is investment for primarily social and
I look forward to the Almanack being widely used
environmental outcomes.
not only as a stimulating read but also as an important
There is an emerging and stimulating space here.
resource for both social entrepreneurs with an idea
As the social investment market continues to grow and
which might make a real difference to society and for
demand develops, many of us are exploring new ways
investors keen to explore how their money can deliver
to encourage the supply of appropriate finance into the
benefits for people and the planet.
For the latest programme visit www.good-dealsuk.com sector. New funds are emerging and new players are
Book your place today at www.good-dealsuk.com entering the marketplace.
Supported by ANGELA SMITH, MINISTEr FOr THE THIrD SECTOr
Telephone enquiries on 020 8533 8890
Or email conference@socialenterprisemag.co.uk Good Deals 2009: The Social Investment Almanack 15

Prelude
Getting your bearings
Timeline
Key events, launches
and developments over
the past 40 years
World map
Navigating the social
investment landscape

the social investment timeline
The social investment timeline
Key events, launches and developments in social investment,
from the early 1970s to the present day, and beyond
1973 unity trust Bank opens local Investment Fund Foursome, a social The Phoenix Fund unltd launched with The Community Over £42m is awarded
— its doors for trading is launched venture fund, is bidding rounds £100m from development Finance to CdFIs by the
Co-operative and — set up — the Millennium Fund association (CdFa) Phoenix Fund
Community Finance triodos Bank is The social Investment — is established
is set up established in the UK task Force (SITF) Charity Bank —
is established is incorporated Bridges Community
1975 — — development Ventures
— NCVO launches the A social Investment Fund 1 £40 m is launched
The oikocredit sustainable Funding Market Group is set up —
Ecumenical Development Project adventure Capital Fund
Cooperative Society is launched
is established —
Community Investment
tax relief is enacted
—
Venturesome, a social
investment fund
providing advice and
capital investment to
charities and other social
purpose organisations
is launched
—
Impetus trust is founded
18 Getting your bearings Good Deals 2009: The Social Investment Almanack 19

the social investment timeline
Community Interest Phoenix Fund office of the third Bridges CdVC Fund II Re-launch of Local First national social se100 Index of growth Launch of a social
Companies (CICs) discontinued sector set up £75m is launched Investment Fund investment conference and impact for social Investment Wholesale
launched — — — as social enterprise Good deals enterprises launched Bank???
— Responsibility for Two social Investment Department of Health loan Fund — by Social Enterprise —
Financial Inclusion CDFIs is transferred to pilot funds £200k funded launches a £100m — nesta enters the magazine and RBS Bank Launch of a social
taskforce established regional development by OTS social enterprise Launch of Bridges social investment — Investment stock
— agencies — Investment Fund Ventures social market with a social Launch of £70m exchange????
Government £120m — Community assets — entrepreneurs Fund Finance strategy and Communitybuilders
Financial Inclusion Fund Big Issue Invest £30m is launched The Office of the Third — announcement of —
including £36m Growth is launched — Sector consults on a risk DCSF launches a £1.25m cornerstone learning launchpad
Fund to support credit Can with private equity capital fund a £100m Youth sector investment in the fund launched by Young
union/social lending in firm Permira launches — development Fund Bridges social Foundation
financially excluded areas Breakthrough social Launch of Charity Bank — entrepreneurs Fund —
— investment programme in the north Launch of £3m triodos — Big Issue Invest social
Launch of government- opportunities Fund The esmée Fairbairn enterprise Investment
backed Futurebuilders — Foundation announces Fund
fund for third sector dormant Bank and a £15m Finance Fund —
— Building societies offering a range Consultation on the
Investing for Good accounts Bill receives of forms of financial designs and functions
advisory service set up Royal Assent assistance – from loans of a social Investment
— — to guarantees to patient Wholesale Bank begins
P3 Capital was launched social Finance is equity to revenue shares —
to serve entrepreneurial, launched to accelerate — OTS/NESTA launch
high growth companies the creation of a social rockefeller Foundation a social enterprise
— investment market in supports feasibility access to Investment
Gexsi (Global exchange the UK study on a UK social (seatI) programme
for social investment) — stock exchange —
starts its operations Catalyst launches Clearlyso, marketplace
— Fund 1: Investing for for social business,
First annual skoll Financial returns enterprise and
World Forum on social with a social Impact investment, launches
entrepreneurship held —
in Oxford, UK First Good deals
— almanack is published
Impetus trust is set —
up as one of the first Second Good deals
venture philanthropy conference
organisations in the UK
20 Getting your bearings Good Deals 2009: The Social Investment Almanack 21

the social investment world map
Navigating the
social investment
landscape
22 Getting your bearings Good Deals 2009: The Social Investment Almanack 23

CHaPter one
A new financial landscape
Introduction
From Bangladesh
to Canary Wharf
people power
Sharing the potential
for good
TORRS HYDRO
SHCA
The good and the great
Seeing is believing
CCLA
MONDRAGON

Introduction
This chapter looks at the current landscape of
As the first publication of its kind, The
Social Investment Almanack exists to showcase > 28 > 36
the different types of social investment.
social investment from two angles: the power Given that social investment is by and large
‘The majority of ‘Over the last 18
investors were years we have done
that individuals amass when they invest a response to market failures on both the
on a small scale, over $1bn-worth
demand and supply side, it aims to demonstrate
together, and the potential impact of larger, how social investment can be done. And it
with the minimum of social mission
investment set at financing, benefiting
institutional investors aims to connect investors with investees, while
just £300’ disadvantaged
filling in the details for all those readers whose
people and low
minds went blank when first confronted with penny Newman
and middle income
the term social investment. speaks about the
communities, and
The people involved in social investment successful £5m
of that we have
vary hugely. Social investors could be individuals share issue of social
From Bangladesh
written off less than
clubbing together with £20 each to fund an enterprise Cafédirect
$100,000’
improvement to their community, they could
be the consumers of a fair trade product (see
> 34 Gary Hattem
to Canary Wharf page 28) or they could be international banks.
This publication tells their stories – analysing
both the social and financial returns they receive.
‘If staff have a stake
talks about Deutsche
Bank Americas’
long history of social
in the business, it’s
It looks at proven examples, emerging models investing
not only good for
and the more experimental ideas.
them but also leads
HOW FAr DOES yOUr imagination travel when
you hear the term social investment?
Microfinance is an international asset class
that has quadrupled in size since 2004 and is
Why now? Social investment is not brand
new, but the last 18 months have seen a growing
to us providing
a better level of
> 40
Are you in Bangladesh with local bankers now worth US $5.7bn [£3.4bn]. In the past amount of activity and interest in it. Recent
service’ ‘This is not a
providing colourfully-clad women with small three years alone, 40 specialised microfinance figures prove the viability of long-established
philanthropic
loans to set up their own enterprises? investment funds have been established across models, such as microfinance, and ethical banks Margaret Elliott
gesture. It is
Are you with venture capitalists in the the world with ever more innovations occurring, are flourishing in the tough economic climate. speaks about the
about us working
boardroom of a glass tower in London’s Canary catering for institutions looking to blend social Interest in community share issues is rising. Sunderland Home
on behalf of our
Wharf considering the business case behind the and financial returns as well as the growing The UK government is very interested in Care Associates
investors to secure
latest green technology breakthrough? number of individuals wanting to make an social investment and has spearheaded a variety employee share
long-term financial
Or did your mind go blank, so you are now impact with their own money. of initiatives. The National Endowment for structure
returns in a way that
wondering what links the small loan providers For example, Kiva, a micro-lending website, Technology Science and the Arts has launched
can build their own
in Bangladesh with the suited and booted assists individuals to invest tiny amounts in its own social investment strategy and the
social impact’
business people in Canary Wharf? micro-enterprises that they choose themselves, venture capital firm Bridges Ventures has a new
The answer is motive. A social investment while Deutsche Bank Americas (see page 36) fund specifically to back social entrepreneurs. james bevan
is money that is deployed to grow organisations is using its microfinance expertise to create funds The list goes on and it is not limited to the UK. talks about CCLA’s
focused on creating positive social and focused on specific social problems. Across the pond US President Barack Obama investment in Triodos’
environmental change. There are many different It may be a world away, but the motive has instituted an office of social innovation microfinance fund
types of social investment, but the motive of the green entrepreneurs in Canary Wharf with money to invest in social enterprises.
of creating a better world underlies them all. is the same as the motive of the microfinance This activity and interest predates the
Importantly, these investments also make lenders. They too are developing businesses financial crisis, but the financial crisis has made
money for people: social as well as financial that will create a better world. They are a publication like this even more important. In
returns grow with each new deal done. also participating in a burgeoning sector, troubled times there is a need to take stock of the
The Bangladeshi women are benefiting supported by social financiers through green strengths and weaknesses of this growing field communityshares.org.uk
from one of the most famous examples of social share issues (see page 32). The global market that promises so much. FIND cabinetoffice.gov.uk
investment – microfinance (see page 44). Their for green technology is predicted to grow in OUT nestalab.org.uk
loans help them create businesses that will financial value every year to an estimated US THErE IS MUCH TO rEAD, LEArN AND DO. THE MOrE kiva.org
feed their families and educate their children. $3tn [£1.8tn] a year by 2050. QUESTION IS: WHAT MOTIVATES yOU?
26 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 27

People power
Sharing the potential for good
giving the public a chance to buy shares in Cafédirect was not just about financing the
company’s expansion. Caspar van Vark discovers how penny newman turned a share
issue into a social investment opportunity – generating both financial and social capital
1998, taking it into a period the chance to buy a share of a
of strong growth and a turnover of business. Typically, a company
around £13m. She had previously launching a share issue does so at
been a marketing manager for The a pivotal time in its growth, when
Body Shop, and today is CEO it has growth potential but needs
of restaurant chain Fifteen and cash to make it happen. The
a social enterprise ambassador. But capital raised by selling shares
a share issue? can be used to take the business
‘I’d never done it, and there into a new phase of growth,
Ugandan tea growers
wasn’t a textbook to tell me how either investing in its core from the Igara factory
WHEN pENNy NEWMAN led to do it,’ she remembers. ‘Traidcraft business or entering new areas. use electronic scales
Cafédirect’s share issue in 2004, had done it, and I asked someone For Newman, there were bought with money
she was treading on uncertain there for ten top tips, but I never several reasons why a share issue – from Cafédirect’s
ground. Newman (pictured above) actually got them. Now I could and restructured governance producer partnership
programme
had been CEO of the fair trade probably write the textbook myself.’ to go with it – seemed the best
coffee and tea company since A share issue offers investors way forward. »
28 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 29

People power
would reinforce what Cafédirect Equal Exchange and Twin ‘Doing that enshrined our advised to use a specialist public ‘Looking back, I think we became
was all about.’ Trading. The aim of the share values,’ explains Newman. ‘It relations company, but decided quite inward-looking during
Not everyone was convinced, issue was to raise £5m by selling ensured that shareholders couldn’t against it. that time. Own-label brands
though. The idea of growth may shares to the company’s producers suddenly abandon our fair trade ‘I was concerned we would were starting to grow, and I think
seem like an obviously good idea – and to the general public, and policy and develop a trading be fed through a standard public we took our eye off the ball for a
I had a vision of turning surely it’s what every organisation to do that, the four founders pattern that wasn’t helpful to little while.’
our trading model into wants? To Newman herself it was would relinquish some of their farmers and producers.’ In the long term, though,
a ‘no-brainer’ because it would share. They each kept around The share issue went live on the benefits have been evident.
an ownership model, mean buying more coffee and tea 10 per cent, with 5 per cent being 4 February 2004, and was fully As planned, the money was used
so that the people who and helping more farmers earn a sold to producer groups and the subscribed within a few months, to expand into the out-of-home
good living. remainder to the public. meeting the goal of raising £5m. market, and Cafédirect entered
grew the products ‘But there was some resistance The company already had The majority of investors were on If you launch a share Hong Kong and Singapore,
could be linked directly within the organisation,’ she says. a charter in place called the a small scale, with the minimum
issue, how do you refreshed the brand and added
‘The concern was control, and I’ve Gold Standard, which set out its investment set at just £300. new products.
with people who seen this concern in other social principles and ways of working. (Cafédirect’s end-of-year report make sure your The growth of Cafédirect
bought the products enterprises. Will you lose control? To ensure that the share issue did for 2004 showed that 60 per cent
values are kept safe also meant that funds could
If you launch a share issue, how not threaten this, share ownership of public investors each owned 500 be invested in its producer
do you make sure your values are was limited to no more than 15 or fewer shares). and that no one takes partnership programme. Between
‘Cafédirect’s concept and kept safe and that no one takes you per cent for anyone other than Under the new governance, 2004 and 2008, £3m – more than
brand were moving from the over, changing your core values?’ the original four founders. It means Cafédirect’s 32 producer groups
you over, challenging half of Cafedirect’s profits – has
niche into the mainstream,’ she The answer for Cafédirect that no one can buy up a huge – representing around 1.2m your core values? been invested to develop growers’
says. ‘In parallel, the company’s was to go ahead with the share share and change the direction workers – were also able to elect organisations.
governance and finance needed to issue, but to build safeguards into of the company. two representatives to the board By successfully launching a
move with it. And thirdly, I had a the new structure which would The four founders also formed (one for tea, and one for coffee). share issue machine,’ she says, share issue, Cafédirect also achieved
vision of turning our trading model protect its social mission. the Guardian Share Company Another director represented the ‘and that they would struggle what Newman always felt was the
into an ownership model, so that Ltd, which owns just one share, public investors. to give the social side as much core of its values: empowering
the people who grew the products ensHrInInG tHe Values and the permission of that And what was the point of emphasis as the financial side.’ producers, and creating a direct
could be linked directly with people Cafédirect was founded in 1991 by company is needed to make any raising all that money in the first Instead, Newman stuck with link between them, the company
who bought the products. That four investors: Oxfam, Traidcraft, changes to the Gold Standard. place? ‘We wanted to build the the company’s existing creative and consumers.
brand,’ says Newman. ‘We were agency, which knew Cafédirect’s ‘Producers were always involved
doing well in retail, but we wanted message well. The share issue in our strategy, even before the
to move into the out-of-home was publicised heavily through share issue,’ she says. ‘But now even
ThE WInnIng formulA market [ie offices, restaurants and on-pack stickers. Meanwhile, more so. They were given a voice,
schools]. We also wanted to expand a small in-house team – including and they could sit at the table.
internationally. And the brand finance and marketing directors – Through the share issue, producers
also needs constant refreshing, with devoted themselves to the launch. and consumers could both have
new products.’ The decision to offer a share issue ownership, alongside the original
was made only in October 2003, founders and employees. It
PuBlICItY and MarKetInG so everything was crammed just reflected what Cafédirect was
Considering Newman was a into four hectic months. This, all about.’
bit of a novice at share issues, Newman admits,
1 More power The £5m 5 years £3m it’s somewhat surprising to did not benefit
growing for its 1.2m support capital invested in learn that Cafédirect didn’t Cafédirect’s day-to- cafedirect.co.uk
company farmers of 4,400 for Cafédirect’s involve many external partners day business. FIND triodos.co.uk
private growth farmers’ in the process. Triodos, which ‘The workload OUT communityshares.org.uk
investors businesses was already Cafédirect’s bank, around this was MOrE socialenterpriseambassadors.org.uk
sponsored it. Newman was horrendous,’ she says.
30 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 31

People power
torrs HYdro
Words: Caspar van Vark
IN THE TOWN of New Mills in enterprise that aims to reduce This capital came from a
Derbyshire, a share issue has carbon emissions by setting up share issue. Members of the
empowered the community in small-scale hydro-electric plants. community, working with Water
a very literal way – by funding a The enterprise found support Power Enterprises, formed The Torrs Hydro
hydro-electric plant. from the local council and the Torrs Hydro New Mills Ltd, an plant at New Mills
The project started through community, but capital was needed industrial and provident society which provides
renewable power
Water Power Enterprises, a social to make it happen. (IPS), to do this. The IPS, to the community
formed in September 2007, then
FIND OUT MORE www.h2ope.org.uk launched the share issue, with
shares costing £1 each and each
ThE WInnIng formulA investment set at a minimum of screw produces electricity as it regenerate New Mills and
250 shares. is turned by the power of water promote environmental
The share issue raised more flowing through it. It generates sustainability in the town. Investors
than £90,000 in January 2008, an estimated 260,000 kilowatt may get a profit in the future
attracting around 200 investors – The share issue raised hours of green, renewable after social objectives are achieved.
many from the local community. electricity every year – enough Following the success of the
The money raised through
more than £90,000, to power up to 70 homes. share issue in getting this project
the share issue went towards attracting 200 Investors in Torrs Hydro off the ground, Water Power
purchasing and installing a 70 do not receive a share of the profits Enterprises has expanded and is
£1 200 £90,000 70 green
kilowatt hydro power plant using
investors, many from generated from the scheme. launching similar hydro-electric
shares investors homes
a 2,000-year-old Greek invention the community The profits are either reinvested schemes in Settle (Yorkshire)
– the Archimedean screw. The into the scheme, or used to help and Stockport.
32 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 33

People power
Photo: Andy Barker
sunderland HoMe Care
assoCIates
Words: Caspar van Vark
FOr CArE prOFESSIONALS, low structure is a hybrid model that The SIP allows the company to
pay and limited benefits are offers the security of collective use its pre-tax profit to buy shares
often a fact of working life. But ownership while still providing from the EBT, to be allocated to
Sunderland Home Care Associates an incentive element through the employees. If kept in trust for a
(SHCA), founded in 1994, has individual shareholding. The period of five years before they are
changed this by offering its staff majority of the 117,000 shares passed on to the employees, they
a share in the business. are held collectively for present are free of income tax and national
Founder Margaret Elliott sees and future employees in an insurance contributions. Only
this as benefiting everyone. ‘If employee benefit trust (EBT), employees can hold shares and
staff have a stake in the business, and a government-approved they have to sell their shares back
it’s not only good for them employee share scheme called a to the EBT when they leave, so
but also leads to us providing a share incentive plan (SIP) is used maintaining the balance.
better level of service,’ she says. to pass shares to employees who The present breakdown of
SHCA’s share ownership have at least six months service. shares in SHCA is 96,737 (82.7
per cent) owned
collectively and
FIND OUT MORE www. sunderlandhomecare.co.uk 20,263 (17.3 per
cent) owned by
ThE WInnIng formulA individuals. Over
the period since
it was launched,
the share price
has gone up
from £2.60 to Margaret Elliott:
£6.60 per share, believes SHCA
which means can provide a
better level of
some employees service if staff
117,000 An Threefold Happy Better
hold almost have a stake
shares employee share workers care
£4,000-worth in the business
benefit trust price rise services
of shares.
34 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 35

the good and the great
different funds. Our
social investment Eye Fund
strategy is premised borrower, the
Seva Foundation
on a fundamental
provides
belief that the best affordable eye
way to benefit the care services in
poor must go beyond a Asia and Africa
continuous infusion of
charitable dollars and
broaden their access
to a more sustainable
source of capital.
You have access to
philanthropic grants,
low cost finance made
as programme related
investment from
the bank’s foundation
and the bank’s
Seeing is believing
balance sheet – how
lucky do you feel?
I’ve got a unique
advantage. We can
assess a project’s
deutsche bank Americas foundation president gary hattem (pictured below) tells capital needs and
Chrisanthi Giotis why his bank is risking $1m pioneering a new type of investment social impact
potential and then
fund to address blindness in the developing world determine whether
a grant makes most
sense, or a higher risk,
low-cost loan made as
to globalise our social investment, non-profits – representing the a programme related
using our capabilities as a financial interests of the communities in investment is better excited because it calls on their own country, it is particularly
services firm to achieve mission which we invest. suited to the circumstance. When a professional capabilities but it’s meaningful.
goals beyond philanthropy. Our finance is mostly debt, project is fully creditworthy, we can also very close to their hearts. Banking as an industry is so
In that time – and this is what though our portfolio includes about proceed with more conventional They are more loyal to the maligned these days; demonstrating
I really want to stress – we have 30 per cent in equity investments, bank financing from our balance bank as a result, and are part the fundamental value of finance
done over $1bn-worth of social which is directed to regenerating sheet. There really is a continuum of an emerging culture among as a means to improve society is
mission financing, benefiting older urban communities with of capital needs within this sector a new generation of banking particularly critical so that we do
disadvantaged people and low affordable housing and business as it develops from early stage professionals who want to use not lose the best talent.
Deutsche Bank Americas pioneers and middle income communities, development opportunities for innovation to more mainstream their skills to improve their
funds that combine social and and of that $1bn we have written minority and women entrepreneurs. maturity. own communities and the What are you pioneering at the
financial returns. Why? off less than $100,000, so this The $1bn figure is a historical disadvantaged throughout the moment?
We have a long history of social sort of finance is of remarkably figure – currently we have nearly How do staff react to social world. We have a lot of foreign The $15.8m Eye Fund 1, which
investing. We’ve been doing it here good credit quality. I believe this $600m under management in our investments? nationals in the bank and when we finished raising funds for
in the US for the last 18 years, and success is the result of working social mission portfolio, of which The younger people in the they are involved as volunteers in June. This was planned to be
for the past 10 years we have started with really good partners – many $170m is in microfinance in four bank, in particular, get really to support a project in their a $20m fund, but in the current »
36 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 37

the good and the great
environment it has taken longer to that supports systems-changing Our other partner – the At $1m Deutsche Bank is not the on how many more clients will be who have the understanding of
raise the funds than we thought. social entrepreneurs all around International Agency for the largest investor in the fund, but served and of how many more poor the local markets and distribution
This Eye Fund grew out the world, and that showed us Prevention of Blindness (IAPB)– we have taken on the highest people will be reached. models and have the trust of the
of our microfinance work. the tremendous need to address has worked closely with the risk by providing investment in local communities.
Through that work we developed blindness in the developing hospitals to make sure they a subordinate position and taking So this stuff excited you then… We want to build the
a capability to structure funds world. There is a much higher have developed their business the first hit if there are any losses. We really want to be the infrastructure for these funds and
incidence of eye disease and capabilities and are ready to take We have also turned the high risk investment bank for social finance attract investors into what is really
blindness in the developing world on the financing. equals high returns relationship on blazing the path for the sector a nascent industry.
and it has a more profound effect We’ve called this the Eye its head by taking a very low return where private finance can make
on people’s lives and livelihoods Fund 1 because we expect there to of one per cent. a real difference. Is this something that could
because they are quickly exited be a follow on fund once we have We’ve done this because we We are also doing other work only in the US where the
from being able to provide for proven how you can aggregate think the real value of our $1m social investment projects. We’re philanthropic culture is stronger
our investors are on their families. socially motivated capital for this investment is encouraging other financing a school system in than elsewhere?
Ashoka introduced us new model of health care and have investors into this pioneering Kenya. Here in the US we are The advantage we have is that the
board for both the to hospitals doing low cost it repaid with interest. space. Also because, unlike government has not been seen as
social impact and the interventions subsidised by microfinance where you can charge the sole provider of solutions to all
charging market rates to those who Why go down the social market rates, lower pricing to our problems. The private sector,
financial return can afford it. So it is a sustainable investment route instead of the hospitals is key at this stage over time, has come to respect the
model but the problem was straight philanthropy? in their development. role of the not-for-profit sector but
that they would have to wait Because of the catalysing effect of When we set up our I think this could absolutely work
to benefit that particular for charitable funds to buy new the investment – we’ve opened up microfinance project, the first fund banking as an industry elsewhere, including the UK.
sector, which we felt was highly equipment or expand to new healthcare for the poor to the huge was harder to raise than the second Ideas are developing and I’ve
transferable to other mission- communities. We realised that source of money which is the private and we’re sure the same will happen
is so maligned these had the pleasure of conversations
driven enterprises. Health care if they had capital on hand for investment community. And here and we will earn better days; demonstrating with Ronald Cohen (see page 90)
resonated as an issue as especially equipment and expansion, and because we saw the hospitals were returns in the second eye fund. and I really respect the work he’s
fundamental to the well being of increased business capability, they really poised for accelerated growth.
the value of finance doing – it certainly has all the
poor communities. could grow much more quickly How have investors reacted as a means to improve right elements.
We were working with in reaching clients and also repay What sort of risks have you taken to the idea of near market returns Over time, I think there might
Ashoka, which is a foundation the investment. to make Eye Fund 1 a reality? – especially in light of the current
society is critical so be an international standard for
climate? we do not lose the social investment but I think we
Our investors are on board for both have to keep our eyes open to
the social impact and the financial
best talent innovations, especially from the
ThE WInnIng formulA return so pricing is a pretty nominal south and developing countries.
issue especially over the past We shouldn’t think we have all
year where markets have collapsed. retrofitting a lot of low-income the answers in the north, although
Social investment now looks homes for energy efficiency and, we are seeing a really good
a lot better in terms of preservation again working with Ashoka, we alignment between the US and the
of capital and especially when, are working to finance solar power UK and learning from each other.
as in the case of Eye Fund, there in the developing world.
is subordinated risk taking the There are a number
$100 2 $2,816 30 45 $170m Millions first fall – it’s a good proposition for of frontiers that hold
low villages loaned by per cent countries in loans lifted more diversified portfolios. a lot of promise and
interest in Kompanion, income to 100 out of a lot of this gets community.db.com
loans Kyrgyztan financed increase micro- poverty Do you evaluate the fund in terms down to the FIND seva.org
by Deutsche for finance of its social impact? capabilities of our OUT ashoka.org
Bank families institutions IAPB is defining the metrics, non-profit and social MOrE iapb.org
which will be pretty simple based enterprise partners
38 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 39

the good and the great
Photo courtesy of Mibanco
CCla
Words: Henry Palmer
AS THE LArGEST investment by the ethical bank Triodos. The participating in an opportunity
manager for charities in the UK, fund was designed to increase that looks to offer a combination
CCLA is no stranger to managing access to financial services for the of excellent long-term financial
its customers’ long-term funds in working poor by offering capital to returns, strong, persistent
ways that do not compromise their local microfinance organisations diversification advantages
social mission. operating in 38 countries. in combination with more
Indeed, the company is one of James Bevan, chief investment traditional assets and strategies,
the pioneers of ethical investment, officer at CCLA, says: ‘On and also significant social and
with a strong track record in behalf of its investors, CCLA is environmental benefits.’
developing
approaches to
investment that FIND OUT MORE www.ccla.co.uk
meet the wide
range of social, ThE WInnIng formulA
environmental
and economic
goals of their Triodos’s 15-year track record In addition to expecting Mibanco
clients. in delivering social and financial financial returns for investors, microfinance
In March returns through supporting Triodos said it was also expecting bank in Peru –
2009, CCLA microfinance partners enabled impressive social returns. These part of the
Triodos
was one of a it to launch a fund that would include tackling poverty by Microfinance
small number appeal to institutional investors. stimulating local entrepreneurship Fund portfolio
£5m Other 100m Investment Sustainable
of institutional Bevan says: ‘This is not about a in developing countries, invested in by
investment investors Triodos in micro- contribution CCLA – is
investors across philanthropic gesture. It is about us boosting the economic and
by CCLA Microfinance finance to fighting helping more
Europe to working on behalf of our investors social empowerment of women
Fund by 2010 institutions poverty than 360 loan
invest in a £15m to secure long-term financial and helping to contribute to the clients including
in 38
microfinance returns in a way that can build their achievement of the Millennium José Antonio
countries
fund launched own social impact.’ Development Goals. Ccencho Limache
40 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 41

the good and the great
CaJa laBoral
Words: Julie Pybus
provided management advice to
SpAIN’S MONDrAGON MCC’s history began in 1941 with war, the local people developed
new and expanding ventures.
Corporacion Cooperativa (MCC) the arrival of 26-year-old Father more co-operative businesses.
Caja Laboral is described
is a phenomenally successful Jose Maria Arizmendiarrieta In 1959, Father
by MCC as ‘the backbone of the
collection of worker-owned in the struggling Basque town Arizmendiarrieta proposed that
co-operative project, enabling
businesses that has become the of Mondragon. all of the co-ops should have
a growth rate that would have
country’s seventh largest business The priest provided the town’s their own source of capital and
otherwise been impossible with
group and the third largest young people with sporting and helped to establish the Caja
just the internal resources of the
employer. The corporation’s cultural activities as well as Laboral bank. Pooling workers’
different initiatives’.
businesses include domestic establishing a technical school. shares of their company’s
Always retaining their
appliance manufacturers, Inspired by the priest’s teachings, profits (6.4m pesetas at the
independence from the state,
a large supermarket chain and the school’s early engineering end of its first year) the bank
as the co-operatives within MCC
construction companies. graduates founded a co-operative provided start-up capital to new
became more established they
Often cited as one of the most business making paraffin stoves enterprises and loans at low rates
sought financial support from
successful examples of worker- called Talleres Ulgor. As the of interest to those that were
a wider variety of institutions.
owned enterprise in the world, economy recovered from the civil growing or in difficulty. It also
From the 1980s, Caja Laboral
focused its energies upon
FIND OUT MORE www.mcc.es traditional consumer and
business banking. Today the
ThE WInnIng formulA bank has 400 branches around
Spain. It still supports MCC
though, giving between 15
Father
and 20 per cent of its net profits Arizmendiarrieta:
to a fund that supports the the inspiration
development of its members. behind hundreds
Today, MCC is made up of co-ops,
including Urssa,
of 264 companies and has a
which built part of
workforce of 92,700. In 2008, Bilbao’s famous
1 town with 1 bank with 6.4m 50 years 264 Income of
MCC’s total income was 16.7bn Guggenheim
ambitions a mission pesetas co-ops 16.7bn
Euros – up 6 per cent on the museum (top)
previous year.
42 Chapter one: A new financial landscape Good Deals 2009: The Social Investment Almanack 43

Perspective
and NGOs dwindle, efforts to help the poor information technology devices and services
will diminish. With the slowing down of for the poorest and most underprivileged
economies everywhere, the poor will lose members of society and to make sure those
their jobs and income from self-employment. devices and services get into the hands of
We had thought food shortages were a those who need them. Information is power.
thing of the past, but now they are back – not Thankfully, the young people of today
due to any lack of productive capacity on the seem to be highly focused on these problems
part of the world’s farmers, and certainly not and sincerely interested in tackling them with
due to lack of effort by the poor themselves, creativity, energy and focus. Today’s youth, I
but largely because of forces that could have believe, can be the socially conscious, creative
been averted – the financial crisis and the generation that the world has been waiting for.
Turning away from world’s failure to pay enough attention to
the need to improve agricultural technology
to increase yields. We have to focus our
For anyone who is wondering, ‘how can
casino capitalism attention at a global level to tackle this great
new challenge to the world’s poorest.
How do we change this? Where do we
begin? Three basic interventions can make a
big difference in the existing system. We see the ever-
First, we need to broaden the concept of
Today’s credit crisis to buy homes. In return for these services, business by including social business in the
growing problems
demonstrates that bankers and other lenders earned a reasonable framework of the marketplace. Making it created by an economy
profit. Everyone benefited. In recent years, easy for individuals and companies to see how
capitalism is out of
however, the credit markets have been business practices can be applied to solving
that is excessively
control. but creative, distorted by a relative handful of individuals social problems, especially those spawned individual-centred
energetic people can and companies with a different goal in mind by poverty, while reinvesting profits in the
– to earn unrealistically high rates of return growth and expansion of the benefits thus
and too aggressively
change the system for the
better, says microfinance through clever feats of financial engineering. created can create a ‘virtuous cycle’ of ever- accumulative
They repackaged mortgages and other loans improving conditions for the planet’s least
pioneer and nobel into sophisticated instruments whose risk fortunate citizens.
peace prize laureate level and other characteristics were hidden Second, we need to create inclusive social I contribute?’ my answer is this: start by
Muhammad Yunus or disguised. They then sold and resold these services that can reach out to every person on designing a business plan for a social business.
instruments, earning a slice of profit on every earth. These include services normally treated Decide which social problem you’d most like
transaction. All the while, investors eagerly as part of the for-profit sector (such as financial to tackle. Figure out what resources you can
The problems began with soaring food and oil bid up the prices, scrambling for unsustainable services, food supply and housing), those use to address it. Develop a plan for applying
prices. By the fall of 2008, the world economy growth and gambling that the underlying usually provided by government or non-profit those resources efficiently and effectively.
appeared to be crumbling, with the most weakness of the system would never come to institutions (such as education), and those Then try turning that plan into reality. The
formidable pillars of the strongest economies light. The result was to convert traditional that may traditionally be provided on either social business you create based on your plan
on the verge of collapse and stock markets capitalism into what many have described as a for-profit or a not-for-profit basis (such as may be small, but if it works it could end up
around the world plummeting. ‘casino capitalism’, marked by irresponsibility health care) It is absurd that after thousands of being replicated in thousands of locations –
This financial crisis offers an interesting and limitless greed. years of social and economic development, our and so end up changing the world.
illustration of the social failings of the existing Millions of people around the world who systems in all these areas have such enormous Today’s younger generation has the
capitalist system. Credit markets were did nothing wrong are suffering. And the blind spots – black holes into which hundreds opportunity to make a break with the past
originally created to serve human needs – to worst effects, as usual, will be felt by the poor. of millions of people fall, simply because and create a beautiful new world. We see the
provide business people with capital to start As economies falter, as government budgets they don’t fit the existing ‘business models’. ever-growing problems created by an economy
or expand companies and to enable families collapse, and as contributions to charities Third, we need to design appropriate that is excessively individual-centred and »
44 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 45

Perspective
too aggressively accumulative. If we let the people’s lives and steadfastly avoid negative
current system continue to operate without impacts. On the other hand, you may prefer
serious modifications, we may soon reach the to use some or all of your talent to change the
point of no return, as problems like global world by harnessing it to address human and
economic meltdown and climate change drive social needs. If so, you can devote yourself
our species and the planet we depend on to the exclusively or partially to social business.
brink of collapse. There is certainly no conflict between the
We are fortunate enough to have been responsible pursuit of profit and the service
born in an age of great ideas. You may of social goals, and I hope you’ll consider the
have a few great ideas yourself. But the big possibility of combining both in your career.
question is, what use do you want to make of The choice is yours.
your creative talent? Do you want to focus
exclusively on making money? If you must, This is an edited extract from Creating a World
go ahead; but when you develop profit- Without Poverty: Social Business and the Future
maximising businesses, be sure that your of Capitalism by Muhammad Yunus. Printed with
businesses also produce positive impacts in kind permission of The Perseus Books Group
MuHaMMad Yunus: BanKer to tHe Poor, by Gemma Hampson
MUHAMMAD yUNUS IS the inspiration to hundreds earn money as seamstresses.
of social investors, social entrepreneurs and Its phenomenal success – Grameen has
business people across the globe who share his a repayment rate of 98 per cent, along with
ambition of eradicating poverty. This Bangladeshi externally verified positive impacts on poverty
economist was awarded the Nobel Peace Prize – means that Grameen Bank has expanded
in 2006 for his pioneering role in microfinance all over the world. Through the Grameen
– giving small loans to the poorest of the poor to Foundation, the model is being replicated
help them to improve their own lives. across Asia, Africa, the Middle East, the USA
Yunus’s first step into microfinance came and even Scotland. In Bangladesh, the average
in 1976 when he saw women in a Bangladesh loan is just $220. In Queens, New York, the
village under the control of loan sharks. The average is ten times the amount at $2,200.
42 women owed a total of just $27. To him, the By 2015, Yunus wants Grameen Bank to have
simple solution was to give the women money reached 175m families worldwide.
from his own pocket to pay off their debts. He In recent years Grameen Bank has Bangladesh to stop millions of people being banking system inclusive to all. He supports the
said: ‘The excitement that was created among developed new projects to fight poverty. poisoned by arsenic-contaminated supplies. implementation of a social stock market and
the people by this small action got me further These include a series of social businesses BASF Grameen aims to provide affordable social business fund and calls for governments
involved in it. If I could make so many people so developed in partnership with some of the mosquito nets in every poor Bangladeshi to radicalise their welfare systems.
happy with such a tiny amount of money, why biggest corporations in the world. household to protect against malaria. It’s likely that we’ll see more ideas from this
not do more of it?’ Through a partnership with French food As the face of Grameen, Yunus uses his visionary man in the years to come.
And so his journey began and the Grameen and beverage giant Danone, for example, experience and passion to influence the next Upon being awarded the Nobel Peace Prize,
(or ‘village’) Bank was born. Small unsecured Grameen is selling affordable yoghurt to generation of business around the world, he said: ‘While I’m happy about what has been
loans – ‘microcredit’ or ‘microfinance’ – are families in Bangladesh packed with nutrients promoting the need to use the latest technology accomplished, I’m unhappy about what remains
given to people to start a business. A loan for for malnourished children. Grameen Veolia for social good and grasp opportunities in the to be done. My ultimate mission is to see a world
a sewing machine, for example, helps women has created a small water treatment plant in economic downturn to create a new-style where there is not one poor person.’
46 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 47

CHaPter tWo
Mr Brown says social enterprise is the business revolution.
We say social enterprise is here to revolutionise business.
By scaling up social enterprise we can all affect social change. At CAN, we help social
Social investment: established models
entrepreneurs build their businesses to maximise their social impact.
If you share our belief in supporting social enterprise, come and talk to us:
Great Offices for the Third Sector provides high-quality
shared office accommodation for social enterprises and
charities in prime locations.
Deploys management expertise and investment into
social enterprises (including the Breakthrough social
investment programme).
Levers business support from corporates to help social
enterprises and charities grow.
canhq@can-online.org.uk
www.can-online.org.uk
Introduction
Unity Trust – a bank with social responsibility at our core. It follows
that we have a natural affinity with our customers and introducers
A springboard to the future
in the social enterprise and wider social economy.
At a time when other banks are retrenching, we continue to grow The proven pioneers
our business with complimentary products and services.
For more information...
Relationships that last
FUTUREBUILDERS
…talk to Neil or Remi RBS COMMUNITY
0845 155 3355 BANKING
When calling, please quote reference: Almanack Services on demand
email: us@unity.co.uk web: www.unity.co.uk
Staying alive
Unity Trust Bank is authorised and regulated by the Financial Services Authority.
Registered Head Office: Nine Brindleyplace, Birmingham, B1 2HB. GLAS CYMRU
Registered in England and Wales no. 1713124.
Calls are recorded and may be monitored for security, quality control and monitoring purposes. ENERGY4ALL

Introduction
Social investment has been up and running for a
or cultural benefits – is lending more than £200m
in total. This year it won the prestigious Financial > 52 > 62
Times award for the most sustainable bank.
considerable time. This chapter highlights some The newest player in the social banking
‘In addition to its ‘The shop now has
usual grantmaking, £100,000 turnover,
of the established models that prove it’s a great sector, Charity Bank, founded in 2002,
The Esmée Fairbairn a sub-post office
became the fourth social bank to show figures
idea, ready for its next stage of development that bucked the recession when it announced
Foundation started and four full-time
offering loans equivalent jobs
an increase in loans and deposits for 2008.
in 2001 in response have been created
It’s not just social banks that have strong
to requests – a real economic
track records in social investment. Some
from existing advantage in a rural
charitable trusts and foundations have had
grantholders’ location’
success with giving loans as well as grants, and
the government has backed what has become Danyal Sattar Sally Orrell
potentially the UK’s largest social investor – explains why explains why
Futurebuilders England. the Esmée Fairbairn Nenthead residents
The enterprises these institutions are Foundation entered clubbed together to
backing are suffering in the downturn but the social find finance for their
they’re not dying – the work they’re involved investment field village shop in
in is too important for them simply to give up, an ex-mining area
and, for many, it becomes even more important
as the downturn deepens. > 56
Social enterprises are working hard to find
revenue streams and markets, whether it be
‘Social enterprises
can, Triodos
> 68
the ethical consumer, the local government
believes, deliver ‘Energy4All was
A springboard to the future
procurement officer looking to contract out
very healthy profits set up in 2002 in
a public service or the grant giver.
to investors if response to daily
Some products and services offered by
properly nurtured’ enquiries to Baywind
social enterprises are actually seeing rising
Co-operative,
sales. Fair trade products, for example, are more Sue Cooper
the UK’s first
than weathering the storm. Food and grocery talks about Triodos
community-owned
THErE’S NO bIG SECrET to successful social banking business profits during 2008. Through researchers IGD found fair trade product sales Bank’s diverse
wind farm, from
investment. At its heart social investment its planned merger with the Britannia Building were up by 23 per cent in December 2008 portfolio and very low
people looking
is good banking – investment in sound Society a ‘super mutual’ with £70bn in assets compared with the same time the year before. level of bad debt
to develop similar
businesses that will make use of the money will be created. The power of the individual as a social
projects’
they are given to grow and flourish. Unity Trust was set up by trade unions in investor should not be forgotten. For many
The trick comes in understanding that 1984 and specialises in banking services for social years, local people have been financing their Andrew King
businesses whose primary motivation is creating enterprises, charities and unions. It experienced own village shops. It’s a movement that is says wind co-ops
positive social and environmental change can be record growth in 2008. Loans and advances growing, sharing the benefits throughout the have become a very
just as successful and sustainable as traditional increased by 56.3 per cent to £117.1m, despite communities. attractive investment
companies that are focused on making money. the bank turning away almost £14m of loan All this means that there is the confidence proposition
In this chapter you will see the proof applications because they did not meet its socially to justify growing social investment. It also
that social investment can and does work – responsible guidelines. means that there is a strong base that can
plunkett.co.uk
and that it’s even thriving in today’s tough Ethical bank Triodos, established in 1995, act as a springboard for new and interesting
FIND icof.co.uk
economic climate. announced record levels of lending to social investment propositions – the kind that we will
OUT triodos.co.uk
One of the pioneers of social lending is enterprises and charities in 2008. In the UK its cover in chapters three and four.
MOrE unity.co.uk
Co-operative Financial Services, the banking lending rose by £20m to reach £93m. For the first
charitybank.org
arm of the Co-operative Group. It entered the time, Triodos – which only finances charities bUT FOr NOW LET’S STOp AND TAKE STOCK OF
futurebuilders-england.org.uk
market in 1973 and saw a 70 per cent increase in and businesses delivering social, environmental WHAT WE KNOW WOrKS
50 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 51

the proven pioneers
Relationships that last
Social investment may be a new concept for some, but for those who have pioneered
it – ranging from trusts to specialist banks – it is a successful model based on strong
partnerships with investees, reports Louise Tickle
WANTING TO SAVE the world has risk profile may be higher than which the lender will often know
not, typically, been a good enough any high street bank would a borrower’s business intimately,
reason for a bank to part with countenance (or even unknown), and will also be able to help with
enough cash to let you get on with the amount of security a borrower contacts and expertise. The focus
the job. can put up may be minimal or of the relationship is also different,
It still takes a fair bit more non-existent and the predicted in that the investor is putting
than simple passion for a cause to financial return may be marginal money into a project for the sake
get investors to stump up, but at (though the social return may of the beneficiaries, rather than Creating a bridge
between social
least there are now a good few out be great). with the aim of raking back objectives and
there for whom the social benefit Crucially, what has been learnt the maximum interest possible for financial returns:
you’re hoping to achieve is the by the variety of organisations themselves. committed
central reason for choosing to back working in this field over many Experience has demonstrated investment
Photo: Kate Biller managers in
your project. years is that social investment is that social enterprises may
forward-thinking
Investing in socially motivated about far more than money being need their borrowing structured organisations
enterprises, however, has its passed from one organisation to differently to conventional work wonders
own built-in challenges: their another; it’s about a relationship in business – and so, particularly »
52 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 53

the proven pioneers
over the last decade, this is the in its management structures the targeted professional expertise thing on the table from us was as a result of the pilot in 2008, with on its investments. ‘The trick
market gap that the pioneers in and capacity is often put on hold. that is always made available. a loan,’ explains Danyal Sattar, an additional £15m, isn’t open will be to measure whether this
social investment have actively Impetus’s unrestricted financing This is very high intensity EFF’s head of environment. to applications that come in ‘cold’ is having a comparable impact
explored. is offered over a period of up nurturing for the beneficiary social In 2007, a 12-month pilot at the moment – its fund managers to our grant-making programmes,’
to five years and does not need to enterprises, which means there are was set up to look at different actively look for opportunities says Sattar.
InVestMent not Grants just 13 on its books. The approach ways of making money available, to make investments in projects Institutional social investors
The word ‘investment’, however, seems to be working. ‘Across working with the social investor they believe are worthwhile, and usually require a return, and
clearly implies that a return on the our portfolio, organisations and Venturesome, part of the then structure the money in the because they’re managing their
money is part of the deal. If it’s a charities have on average grown by Charities Aid Foundation. way that best suits the organisation own customers’ money, can’t
trust or a foundation providing 29 per cent a year in income, and Some organisations may be in question. just shrug their shoulders if a
the finance, this is not always the by an average of 53 per cent a year legally structured in such a way The Finance Fund has social business they’ve invested
case, though it may be that at least We don’t back a in terms of the numbers of people that they cannot offer equity in also looked to see how its in goes bust.
part of the investment has to be helped,’ says Soares. return for investment money, Sattar money could be lent on by
paid back.
big project or a What happens, though, when explains. One way of investing intermediaries, and have invested
The Impetus Trust, which won little project, we a funder wants their money back, and seeing a return in this case £750,000 each in Triodos Bank’s
Top Grantmaker at the Charity or chooses to price the investment is by making what is known as Opportunities Fund, the Big
Awards 2008, says it operates a
back a plan for risk they take by charging interest? a ‘quasi-equity’ investment, and Issue Invest Social Enterprise
principle of ‘venture philanthropy’ transformational In addition to its usual taking a percentage of revenue. Investment Fund, The Ecology
– unrestricted funding that is
social impact grantmaking, The Esmée Fairbairn ‘With [environmental Building Society and Bridges Across our portfolio,
inextricably linked to time and Foundation (EFF) started offering charity] Global Action Plan, for Social Entrepreneurs Fund.
expertise donated by professionals loans in 2001 in response to instance, we take a small share
organisations and
from companies both large requests from existing grantholders. of their revenue growth, and as tWo tYPes oF return charities have
and small. be repaid. It is tied to pre-agreed By the end of 2006 it had lent GAP has grown strongly, that’s The return varies from deal to
‘We don’t back a big project milestones that have been worked £1.8m to 12 organisations. With performed very well financially deal. ‘The Ecology Building
on average grown
or a little project, we back a plan out after deep research has been that experience behind it and for us. It’s a way of investing that Society money is an unsecured by 29 per cent a year
for transformational social impact,’ carried out into the organisation with other socially interested also works for times like these, loan to strengthen its capital
says Impetus CEO Daniela and the individuals who run it. lenders developing the same kind because if an organisation isn’t base; that will pay regular rates
in income
Barone Soares. Impetus works on a multiplier of facility, plus new CEO, Dawn growing, then we stand side of interest and return our capital
‘It is not that the organisation principle; once it has approved Austwick, driving change, EFF by side with them and share their in due course,’ says Sattar.
necessarily has to be scaled up but an organisation and put up its began looking to see what it could risk,’ Satter says. ‘On others, we have a range of Specialist lenders such as
that the work can be scaled up.’ own money, it will then go to offer that would be different. As Sattar points out, given expectations about rates of return, Charity Bank and Unity Trust
Unrestricted funding, rather other socially minded funders that EFF is used to making a but at least hope to get our capital Bank offer a wide variety of loans,
than discrete chunks of money who would normally be offering Calls For equItY 100 per cent loss on its grants, back when they exit.’ from a traditional mortgage
tied to a project, can be very hard project finance, and persuade ‘We were hearing things like “we anything over a return of zero Of course, EFF is looking to a grant bridging loan, to social
for a social enterprise to come them to cough up on the strength want long-term patient money is a pretty good result. The new for a social or environmental enterprises – and in the case of
by, and means that investment of its backing – plus that of or we want equity”, but the only Finance Fund that it established return as well as a financial one Unity Trust Bank to conventional »
Triodos – the world’s most sustainable bank.
Triodos – the world’s most sustainable bank. * *
See our profile in the directory todirectory why. out why.
See our profile in the find out to find
54 Chapter two: Social investment: established models * Triodos Bank won the Sustainable Bank of Times Sustainable Banking Awards, see Good Deals 2009: The Social Investment Almanack 55
* Triodos Bank won the Sustainable Bank of the Year Award at the Financial the Year Award at the Financial Times Sustainable Banking Awards, see www.triodos.co.uk/bestbank for more.
www.triodos.co.uk/bestbank for more.

the proven pioneers
businesses – on which interest is and sustainable living initiatives. lending to. Our incidence of bad end of course we are a bank and means they’re able to address from the off, and tend to mix this
payable. Both have done so for Clearly, investors in social debt is much lower than would would have to call it a day at some customers’ individual needs. Key with a loan,’ she explains.
years using this specialist social businesses must accept they are normally be expected. We budget point, but a lot of effort, time and Fund Yorkshire for example, Key Fund Yorkshire will also
lending as a strong business tool taking a risk, just as investors in for just 0.25 per cent of our thought would go into helping which set up in 1999 in the midst sometimes pay for a potential
and attracting socially conscious conventional business do, but loan book to go on bad debt. them stay afloat before that of depressed south Yorkshire customer to get the expertise
depositors. Despite the recession by setting up this kind of fund, happened.’ coalfields communities, has been that can help them become
both lenders have announced Triodos is making it plain that Meaningful social change able to offer a mixture of lending investment ready.
growth in both deposits and it judges there is money to be does not often take place in a and grants to people wanting to set It has underwritten
lending for 2008. Ethical bank made when green businesses couple of years, especially in areas up new businesses who couldn’t community share issues in case
Triodos has also grown – 13 per are enabled to flourish. And it of real disadvantage. For a social access mainstream bank finance. the social enterprise in question
cent for 2008 – and come away perceives risk very differently enterprise to get hold of what is The Key Fund is run to be didn’t make its target, as well as
with the 2009 Financial Times to a high street bank or a
If an organisation becoming known as ‘slow money’ responsive to individual customer offering a two-year open facility
Sustainable Bank of the Year conventional investment fund isn’t growing, then to help develop their activities over needs, says CEO Ann Oldroyd, on the back of one particular
Award. But it’s not resting on its because of its detailed knowledge a decade or more is a challenge and can on occasion make the share issue in case investors
laurels. Instead, it continues to of particular sectors.
we stand side by side that has been taken up by some decision to wait years before getting wanted to cash in their shares
actively take long-term investment with them and share community development finance any payment back. and the social enterprise couldn’t
risks on emerging socially aware a deeP understandInG institutions (CDFIs). ‘What we do is provide a afford to buy them back.
industries. When it comes to making a simple
their risk These are entirely staircase of financial services, Whether a trust, an ethical
Social enterprises loan, Triodos has, according to independent organisations, many combined with a framework bank or a CDFI, it’s clear that
can,Triodos believes, deliver deputy head of business banking of which received money from the of development support in order social investors have more than
very healthy profits to investors Sue Cooper, ‘a range of risk in And it is very unusual for us to government’s Phoenix Fund, and to maximise the potential of our established themselves over
if properly nurtured. Its recently our portfolio, and we will price go over that.’ now raise money from institutions clients. For example, in addition the last decade and are looking
launched EIS Green Fund, for that accordingly’. It’s when business goes badly such as regional development to standard loan arrangements, forward to doing more good deals
instance, is asking investors She adds: ‘But we don’t use that having an investor who is in agencies to lend to individuals and terms can include capital in the decade to come.
for money that it will then sink credit scoring. We use people the game for your sake just as much businesses that would otherwise holiday periods
into ‘high growth potential to make decisions and depend as, if not more than, for their own, find it hard to get finance. They or stepped
sustainable UK companies’ – on their experience, knowledge that can make all the difference. usually operate in areas of multiple repayment
triodos.co.uk
organisations it believes can and skills. And we have a deeper ‘We would engage in a lot of deprivation and tend to keep arrangements.
FIND unity.co.uk
deliver high returns including understanding of the activities discussion and go into a lot more their lending within a defined ‘Occasionally
OUT charitybank.org
green energy, green technologies and markets and sectors we’re depth [to find a solution] than my geographic locale. we might convert
MOrE esmeefairbairn.org.uk
experience of Their small size and detailed loan into equity.
impetus.org.uk
working in a local knowledge can give And we do take
ftconferences.com/sustainablebanking
high street bank CDFIs a level of flexibility that equity sometimes
ThE WInnIng formulA would suggest
they typically
do,’ says Cooper.
‘We’d think
about whether
we could
introduce them
to someone
who could help;
£1.65 4,000 24 per 2p Finance for could they
Triodos cent dividend 220 European restructure,
renewables increase per renewable could parts of
shareholders in turnover share energy projects their business
be saved. In the
56 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 57

the proven pioneers
IN
PRACTICE
FutureBuIlders enGland
Words: Louise Tickle
LAUNCHED IN 2004 , managerial and governance to report to it can support different
Futurebuilders England is one structures so as to take on investment types of ventures that most
of the the largest social investors loans from other organisations, investors would not consider.
in the UK, and its money is bid for major contracts and deliver In backing these groups, the
aimed squarely at improving the them successfully. relationship with the investee is
financial and strategic capabilites Sue Peters, managing director crucial, says Peters.
of the third sector – most often of investments at Futurebuilders, ‘We now make sure that
through enabling them to win says, ‘In the last three quarters an assessment of the personal
public contracts. of 2008 our investees won 90 relationships is recognised
Funding comes primarily contracts worth over £16m. The as a very important part of our
from government, via the Office third sector organisations that have risk evaluation process,’ she says.
of the Third Sector and the received an investment loan from In June 2009, Futurebuilders
Department of Health, and the us said it gives them increased took over the management of the
aim is to provide investment where credibility with commissioners and Department of Health’s Social
there is a gap in the market. a better chance of winning public Enterprise Investment Fund, in
It offers loans at competitive service contracts.’ partnership with Partnerships
rates, often coupled with grants. Futurebuilders says its approach UK. The fund has £70m available
In-depth business support is also to social investment always involves for start-up and existing social
available helping organisations much more than just handing over enterprises in the health sector
develop strong enough financial, the cash. As it has no shareholders over the next three years.
FIND OUT MORE www.futurebuilders-england.org.uk
ThE WInnIng formulA
StreetVibes Youth
provides accredited
training in music
industry skills for
young people. It has
won contracts with
local youth services,
the Learning and
£330m 300 third 9 90 £16m More Skills Council and
the LSE following
govern- sector months contracts income sustainable a £200,000
ment groups won by third sector investment support
investment the groups from Futurebuilders
58 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 59

the proven pioneers
IN
PRACTICE
rBs CoMMunItY BanKInG
Words: Henry Palmer
SCOTCASH, A SOCIAL enterprise financial exclusion the bank was ‘Once they were in the financial
set up to offer financial services to also creating a market for itself – a mainstream, they would not only
those targeted by predatory lenders clear example of a large institution be saving huge amounts of money,
in Glasgow, is an example of how engaging in social investment. but would also eventually be
one mainstream bank partnered Eric Munro, director of able to access other appropriate
with a host of other organisations community banking at RBS, financial services.’
all with vested interests in tackling explains: ‘By ensuring financially Since opening its doors in
financial exclusion. excluded groups could avoid resorting January 2007, Scotcash has
Scotcash was created in to very expensive forms of credit provided 2,391 loans totalling
response to growing concerns we would also grow the number £1.28m and opened more than 654
about the levels of poverty among of people in Glasgow opening one basic bank accounts for previously
Glasgow Housing Association’s of our basic bank accounts. unbanked customers.
tenants. Evidence suggested they
were becoming poorer still because
of the high rates of interest they FIND OUT MORE www.scotcash.net, www.rbs.com/community
were paying to doorstep credit
companies and others. ThE WInnIng formulA
The Royal Bank of Scotland
(RBS), Glasgow Housing
Association, Glasgow City Council
and the Scottish Government
formed a unique public/private
sector response to invest in a scheme Scotcash: taking
to boost levels of financial exclusion a bite out of the
and help tackle poverty. loan sharks’
2,391 A £1.28m Families save profits, thanks
RBS, which has operated a
loans to reasonable out on loan £2m in interest to backing from
community banking division since
low income rate of and RBS gains RBS and others
1998, also saw a clear business case.
families interest customers
By tackling poverty and combating
60 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 61

services on demand
Photo: Simon Fooks
Gray and Sue Darby
at Feckenham
shop in Worcester
which stocks local
produce
Staying alive
A village shop is often described as the heart of the community – is it any wonder then in the shop, which stocks more national Village Retail Services company. The community owned
than 600 items. A manager is paid Association (ViRSA) network facility in the centre of the village,
that local people throughout the uK have come up with innovative social financing an honorarium of £800 a year. to enable communities to learn which cost £225,000 to establish
solutions to keep the lifeblood of their town pumping? Nicola Carroll reports Rent is £100 per week and a 20 per from each other. eight years ago, includes a post
cent mark up is usually charged office, community room with a
on goods sold. Annual surpluses, FroM tHe draWInG Board library and computers, and two flats
‘bUy FIVE TO stay alive’ is the Association Ltd, who was a a barn building rented from the which total around £2,000, pay for Richard Fry, who chairs the above, which provide much-needed
motto of Bicknoller community leading force in mobilising the parish hall. A total of £11,000 a party for the volunteers. committee responsible for Halstock affordable rural accommodation.
shop in Somerset. The shop is locals to set it up. locally raised finance and a £2,000 It was a blow, says Lees, when village shop, was a co-founder of Fry’s accountancy background
a non-profit-making venture, set ‘We didn’t use words such regional development agency the post office, which formed part the network. He explains how his enabled him to create a financial
up by the local community and as social enterprise back then. grant enabled the premises to be of the shop, was lost in 2008 as part village pioneered a community model that proved the rental
run entirely by volunteers for the Following the closure of the refurbished and start-up stock to of the national closure programme. ownership model back in the early income stream from the shop and
benefit of fellow villagers, who existing shop, we just went around be purchased. ‘But we have prospered since and 1990s. ‘It wasn’t easy because the flats would cover a mortgage.
are urged to buy at least five items to everyone in the village with a A limited company was it has enabled us to have a bigger we had to think it all through from As well as raising sums through
a week to ensure they don’t lose begging bowl and convincing spiel. formed and registered as a friendly shop and always have two people scratch and there was no legal grants, a debenture re-issue and
the service. We asked for loans repayable society, whose constitution says behind the counter, which is a model to follow.’ a £95,000 Triodos Bank loan, and
Bicknoller was among the after three years with no interest that all profits are ploughed back benefit.’ He adds that a shop in a A not-for-profit company was a range of fundraising activities
early wave of community-owned and were greatly cheered when into keeping the service viable. village can be an economic boon as set up and nil interest debentures ‘brought people together’, he says.
rural shops in the country when it we exceeded our target within Eight people, who between them it enhances the value of property by issued. From the initial £12,000 ‘It shows what self-help can
opened in 1995. six weeks.’ have a wealth of experience from up to 10 per cent. raised to temporarily lease a cottage, do,’ he says. ‘Sometimes people
‘The shop has transformed Lees adds that the process of their professional lives, sit on the Lees pays tribute to the the 400-strong village of Halstock just need confidence to get going.
the village and given us great setting up the shop was ‘not always management committee. Out late Derek Jones, who helped now boasts a thriving shop with The financial models, company
community spirit,’ says John easy and certainly not quick’. of 225 people who live in the set up both Halstock Village a £150,000 turnover, managed structures, support and advice are
Lees, chair of Bicknoller Shop It took two years to find the site, village, more than 40 now work Shop Ltd in Dorset and the by a couple who rent it from the all available now.’ »
62 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 63

services on demand
The original ViRSA network a total of £2m over three years. shops are expensive. For example,
Nenthead
is now flourishing under the However in June this year, in the management committee at Community Shop
Plunkett Foundation’s umbrella response to growing demand, it was Almondsbury, near Bristol, has a £100,000
of wider activities to promote extended for another three years price-checks every item sold turnover
rural social enterprise and We didn’t use words so that a further 60 shops will against Tesco.
Plunkett is the principal national be able to apply for up to £40,000 Nor are community shops just
source of rural community retail
such as social in funding – half as a grant from a feature of affluent villages. Sally
information and support. Free enterprise back then. the Esmée Fairbairn Foundation Orrell, chair of the Nenthead shop
support from community retail and the other £20,000 provided management committee, whose
advisors is provided to get shops
We just went around as a loan from Co-operative and store in Cumbria opened in 2007,
up and running. ‘It used to take everyone in the village Community Finance. The funding says: ‘We are not a pretty Lake
around two years and now can must then be matched by equivalent District village, but a low income
take as little as a few months,’ says
with a begging bowl community contributions of up economy in a former lead mining
Mike Perry, communications and convincing speil to £20,000. area with no public transport and
and research manager at Plunkett. Village shops are not just lots of single parents and people on
growing in number; the range of pension credit.
a trIGGer For aCtIon facilities on offer is also expanding, ‘The people who had owned
And village shops are definitely than £60,000 to set up. Average with cafés, prescription collection the shop retired and when there
on the up. As at May 2009, 204 annual turnover was £91,463, an and dry cleaning often provided was no shop for six months, it was
community shops had been increase of over £10,000 since and larger ‘multi purpose centres’ very difficult. The community-
opened and there were 100 more 2005, according to Plunkett’s last such as Tackley in Oxfordshire and owned shop in Melmerby, 15
in development. While there were state of the market survey. The Blisland in Cornwall becoming miles away, was doing well and the
an estimated 1,000 commercial majority of community shops have increasingly common. person who runs it came and spoke
shop closures in rural areas in 2009, industrial and provident society The social benefits of at a public meeting. It was good to
compared with around 300 in 2007, status, although the community volunteering are well recognised. hear from someone else who had
this is often a ‘trigger’ for local action interest company is becoming And shops can offer work done it. We got a group together to
and Plunkett has received three more popular. experience for young people and take it forward from there.’ make fresh, healthy, affordable Pioneers struggled to pool together
times its usual number of enquiries Funding for rural retail has a way back into employment for Various grants and a loan from local food more readily available. one pound per person to open
for assistance establishing stores. been available through the Village women who have had time out the Co-operative Finance Group ‘We are trying to source as much their store in 1844, selling butter,
Plunkett figures reveal that 90 Core programme, operated by to bring up children. Perry says enabled the shop to be set up in the stock as possible from within a 30- sugar, flour, oatmeal and candles.
per cent of village shops cost less Plunkett, which initially provided it is a misconception that local over-60s club building in the centre mile radius, which is good for the Like the original pioneers
of the village on a 99 year lease and local economy’, she says. of social enterprise, when faced
local people helped decorate the Rural communities that have with economic challenges that
new store. banded together to ensure the threatened their quality of life,
ThE WInnIng formulA ‘We try to balance keeping survival of their shops have not modern pioneers of community
the costs down with being a viable only found a way to maintain retail have found solutions that
business,’ Orrell says. The shop services; they have also brought make sense. And the burgeoning
now has £100,000 turnover, a social and economic life back to of rural community enterprise
sub-post office and four full-time their villages. The mutual aid means many more are likely to
equivalent jobs have been created principles in evidence in these follow in their footsteps.
– a real economic advantage in a villages
rural location. echoes the
plunkett.co.uk
Local produce totals around origins of the
£20,000 £20,000 £20,000 Village Support for Stronger FIND esmeefairbairn.org.uk
27 per cent of sales in community- co-operative
from the grant loan shop, local community OUT icof.co.uk
owned village shops and Nenthead movement
community services economy MOrE cooperatives-uk.coop/live/cme345.htm
is a pilot for Making Local Food – when the
and jobs cicregulator.gov.uk
Work, Plunkett’s programme to Rochdale
64 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 65

services on demand
IN
PRACTICE
Glas CYMru
Words: Nicola Carroll
IT IS NOT often that a utility business model for a large utility surpluses. Profits are reinvested
company pays its customers. But company. It is run exclusively for in infrastructure and service
since 2002, the 1.3m customers the benefit of its customers and has improvements. The company
of water company Glas Cymru no shareholders. believes the £1.3bn investment
have received an annual dividend. ‘So instead of paying dividends programme for 2010 to 2015
Glas Cymru is a single purpose to shareholders, we pay a dividend to outlined in the business plan it
company formed in 2001 to own, all customers. In 2009 the dividend submitted to industry regulator
finance and manage Welsh Water. is £22 and we pay it by taking Ofwat will balance improved
Managing director Nigel Annett £11 off each water services charge standards with continued
and finance director Chris Jones and £11 off each sewerage services affordability.
were previously managers at charge on the annual bill. We are Glas Cymru’s commitment to
Welsh Water. They had the idea the only water company to pay educating future generations about
of creating the ‘not-for-profit’ a customer dividend in this way.’ sustainability also means tens of
enterprise to buy the utility from It is a company limited by thousands of children have visited
its private American owners guarantee and its assets and its three education centres and
through a bond issue. Annett capital investment are financed taken part in activities to raise their
says: ‘Welsh Water is a unique by bonds and retained financial awareness of green issues.
FIND OUT MORE www.glascymru.com
ThE WInnIng formulA
Pupils from Llysfaen
primary school
taking part in Welsh
Water’s education
programme to learn
2 80 £1,900m Cheaper Better Greener
about the importance
determined financial bond water infra- environment of water
employees institutions issue structure
66 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 67

services on demand
Investing together:
One of the turbines
IN at Westmill
PRACTICE
Wind Farm,
enerGY4all
a co-operative set
up with support
from Energy4All
Words: Nicola Carroll
ENErGy4ALL WAS SET up in 2002 Energy4All supports and recent falls in interest rates,
in response to daily enquiries to the co-operative boards and this has become an unexpectedly
Baywind Co-operative, the UK’s offers consultancy services and attractive investment option.
first community-owned wind consultation with community We look forward to developing
farm, from people looking for groups, local authorities and many more such social enterprises;
advice and support to develop energy agencies. Energy4All is harnessing power of local people
similar projects. owned by the co-operatives it and the natural, free resource of
So far, it has developed seven creates and ploughs any surplus wind and rain.’
co-ops and helped them raise back into its schemes. Energy4All has also developed
more than £13m for renewable Its chair, Andrew King, a model for community groups
energy schemes – using equity explains: ‘With the co-ops to buy a stake in the wind farms
capital through public share issues, delivering an annual return of which are started by commercial
supported by bank borrowing between six per cent and 11 per cent, developers.
where necessary.
Its mission is to help local
communities own a stake in green FIND OUT MORE www.energy4all.co.uk
energy as part of the UK’s transition
to a low carbon economy. ThE WInnIng formulA
Its latest green energy venture,
Fens Co-op in Lincolnshire,
purchased two out of the eight
two-megawatt wind turbines
Photo: Westmill Wind Farm Co-op
at Deeping St Nicholas, the
largest owned by a local group
in England to date. They were
bought following a share offer,
1,100 £2,400 £2.6m 2,000
which raised over £2.6m from
co-op average funding eco-
1,100 members. The output from
members in investment powered
the two turbines will generate
Lincolnshire homes
electricity for around 2,000 homes.
68 Chapter two: Social investment: established models Good Deals 2009: The Social Investment Almanack 69

Perspective
their customers are and what they deliver know and understand social enterprises
financially and socially. and who have built up a track record
The second group looks beyond the of effective and efficient support. These
immediate horizon to the next (and people should have a clear career path in
the next and the next) generation of social supporting social enterprises to become
enterprises. These social enterprises will investment ready.
grow the field from the niche, bit-part it
currently plays in the overall landscape of There are no clear answers to these
UK business to being a significant force questions right now. But asking them and
for good. They will show how socially supporting robust experiments in finding
organised and motivated businesses can solutions is a priority.
keep their eye on the bottom line while A good starting point is to look at
delivering value to people and places. investment readiness models currently available
So do we have clear, coherent ways of in the private sector. Experience suggests there
supporting this transformation? Do we have is a grid into which approaches fall. They can
professional, ambitious support services to be mapped against two axes with cost/growth
help businesses strengthen and illustrate
An elephant called the investment opportunity they represent?
And can these services and tools match the
scale and ambition of the social investment
investment readiness revolution in play? The short answer to these
questions is no – here is our elephant in
the room. The time is now right – possibly This brave new world
overdue – to look at these challenges.
We can’t ignore this, so how do we deal
of supply of capital
We have made many strides in the world is getting some traction – from big, meaty
with it? Well, as the saying goes, one bite at requires a flow of viable,
a time. There are three big questions to ask:
of social investment but let’s not forget
social enterprise equity funds, through fair creative, scaleable social
trade and renewables bonds and share issues
the tools to help social enterprises to communities marshalling their own
• What works? What doesn’t work? How enterprises to invest in
can we build a support system that
financial resources to secure local services
move into the mainstream economy are doesn’t involve reinventing the wheel for
like shops and pubs. Of course, we are still
every business that is supported? gain on one axis and stage of business on the
overdue, says Sarah McGeehan far from scale and maturity. The asset classes
• How do we pay for these services – both other. Early conclusions make a strong case for
of social investment Sir Ronald Cohen has
now and in the longer term? Currently, matching high cost, intensive inputs to high
envisaged are some way off – but my, haven’t
third party funding (mainly from the impact, large scale businesses with lower cost,
IT’S TrUE THAT when you are still on a journey we come a long way!
public and charitable sectors) means lighter touch inputs making more sense for
it’s hard to see how far you have travelled But wait! Hold on now! There’s an
that some support is free at the point of businesses at an earlier stage of development
and retain a clear picture of the heights elephant in the room!
delivery. And some social enterprises pay or with a more modest vision.
already scaled. This brave new world of supply of capital
directly for the support they receive (some Experience from other areas of social
It’s heartening to stop and reflect that requires a flow of viable, creative, scaleable
are ‘input’ fees and some are ‘success’ enterprise support suggests that some
even three years ago many of the partners, social enterprises to invest in. Broadly, there
fees). To date there haven’t been a lot approaches in the traditional, commercial
stakeholders and investors in this field were are two groups here. The first is made up
of resources from investors in the field. world have relevance to social enterprises
a million miles away from acknowledging of social enterprises that are currently or
• Who will deliver these support services? although they may need refining
the legitimacy of social investment – even imminently investment ready. These are
How do we get a critical mass of and adapting to fit the particular needs
considering it – let alone committing pounds businesses that have already built their product
ambitious, professional, skilled people and stages of development of the social
and pence to it. or service, with a team in place that can realise
into this area? We need people who enterprise sector. There are also some needs »
The idea that you can do well and do good growth plans and a clear idea of who or what
70 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 71

ProMote YourselF
Perspective
specific to social enterprise. These are: we will see the same occur with support.
For Free
NESTA, the Office of the Third Sector and
• Better support for financial planning, others are currently exploring what support
reporting and analysis. works. As it develops over the years this
• Broader, faster solutions to understanding Almanack can serve as a barometer of that
governance structures and more standard progress – showing us not just where we are
practices for enshrining social and
business aims.
going but where we have been.
Tell our readers all Your FantastIC neWs by posting your
• A focus on cultural change and building stories directly on to our website at:
an ecosystem of social enterprises sarah McGeehan is head
that have a track record in growth, of social finance for the Lab
development and scale. at the National Endowment
www.
• Developing business or sector specific for Science, Technology and
services – one size does not seem to fit all the Arts (NESTA). She leads
as businesses get bigger. Social enterprise its risk capital programme
needs a range of specialist professionals to give social enterprises the resources they
services that unlock particular need to grow.
social
legal, accounting or financial challenges. Before joining NESTA, she spent five years
with the Community Development Finance
Just as we have seen social investment supply Association. She also worked with think-tank
transform over the last three years, hopefully, the New Economics Foundation.
enterprise
live.com
72 Good Deals 2009: The Social Investment Almanack

Perspective
A totally Lush way of
doing business
lush founder Mark Constantine explains company survived with little cash and seven
people running it as volunteers. But it wasn’t
to Claudia Cahalane how an ethical
long before investors spotted the gem and
business takes on investment, maintains Constantine and his six fellow founders
decided to take a total of £500,000 from two
its independence and generates returns
individuals. One was Andrew Gerrie, who
any corporate would be proud of has been his business partner ever since, and
the other was Gerrie’s ex-boss.
Constantine was grateful for the money
– it allowed Lush to begin opening its first
bEFOrE THE pOTENT scent of Lush hit our shops. But sitting here in the homely front
high streets 14 years ago, co-founder Mark room of the company’s head office in Poole,
Constantine already had plenty of business Dorset, he comes across as very cautious
experience. about how, and whether, ethical companies
He’d supplied the Body Shop in its should take on investment.
early days through his toiletries company Constantine is debonair and wearing an
Constantine & Weir and then ran a cosmetics understated, smart-casual suit. In contrast,
mail order business. The second company the two staff who let me into the office
became a victim of its own success and was moments earlier were casually dressed with
unable to keep up with demand. But luckily hair more colourful than a Lush bath bomb.
suppliers and stakeholders had faith in ‘I was very careful about how I took Constantine:
herbalist Mark and his wife Mo and rallied investment,’ reveals Constantine. ‘How believes ethical
around to get them back in business. a business takes investment is very important, businesses should
In 1994 Lush, named by a customer, it’s where most businesses screw up. In make healthy profits
was born. For the first year, the fledgling our case, the investors were controlled from »
74 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 75

Perspective
of the original team have 650 profits. He is adamant that a good profit is the business. Once you are sure that you have
shops (mostly rented) and key to independence, and he is disappointed a healthy business and enough profits to spare
6,000 staff worldwide. Lush by the various ‘sell-outs’ of companies then you can give some of your surpluses away.
is a popular company with pitching themselves as ethical. Constantine But giving should have some structure, says
an extremely loyal customer suggests a lack of business sense sometimes Constantine. He takes a more traditional
base – its web forum more leads ethical companies down this route. approach to philanthropy than that which
than reveals this. ‘You’ve got Anita Roddick selling half is prevalent in this publication. And he often
The company has of her company for under £10,000 to a local requires the charities Lush supports to use
finances that any ruthless garage owner to buy her second shop back in only a minimal percentage of the donation
corporate would be proud the seventies, and then going to the city to on administration.
of, but remains true to try to dilute that and ending up selling out ‘There are far too many people who have
its ethical principles. Its to arch enemy L’Oréal,’ he says. no idea how to give their money or who to
factories and depot are give it to,’ he says.
still in Poole for UK sales However, he does say that he would be
with seven more factories willing to invest in smaller social businesses
worldwide near to the point and he would also invest in the proposed
of sale in an effort to cut social stock exchange (see chapter four) but
down the company’s carbon he wouldn’t float Lush on it.
footprint. All products use
how a business ‘I don’t think investors are comfortable
fresh, natural ingredients takes investment is with some of the campaigns we support,
and there’s a strict no animal Plane Stupid [anti-airport expansion group]
testing policy. Plus, Lush
very important, for example and the Hunt Saboteurs – who
actively sources ingredients it’s where most are actually just lovely people who care
which are non-destructive about animals. And I wouldn’t want to feel
and often from worker co-
businesses screw up compromised in what we support because of
operatives. The vast majority investors.’
of products also have little or He feels that coming to an agreement
no packaging. He also talks about Innocent recently on how such an exchange could operate
selling part of the company to Coca Cola. is no mean feat and would involve much
This wouldn’t have happened, believes deliberation.
Scent of success: Constantine, if the company had had As a potential investor he could offer some
Lush products a healthier profit margin. Although, he essential nuggets of business advice to new
are ethically says he does understand that faced with companies. The most important, he says,
sourced and have responsibility to thousands of staff, a is for ethical businesses to work with an array
an extremely loyal business may feel it’s ethical to take this kind of banks.
customer base
of investment to keep the business going. ‘Never have a relationship with just one
‘Thankfully, we’re under no such pressures bank, always have several on the go, always
the beginning and were told quite clearly that Constantine’s own ethical credentials at present,’ he says. think ahead of them and always negotiate
they couldn’t demand an exit. are far from the average managing director His philosophy is to maintain a strong ahead of your needs,’ says Constantine.
‘I also made an arrangement with them of a multi-million pound business, too. business nose, while firmly keeping the ‘You need to have them competing for your
about the sort of return they could expect. He cycles to work, usually makes his own company’s ethical credentials intact. Lush business.
The deal was that it would be the best deal lunch and has lived in the same house for 25 focuses on creating a decent profit – that is, ‘We really, really, really work hard on our
they’d ever had,’ he grins. years. This is despite being worth a reported not charging rock bottom prices for products, banking,’ he says. ‘Controlling the banks,
Both investors have now been paid back £50m-plus. but still providing value for money. And, rather than tying yourself up with which
and the company is operating with a turnover But while he is modest with his own paying staff and suppliers fairly but not bank to go with is key. Because if that one bank
of £230m. Year-on-year growth is around the finances, the businessman believes it is excessively. This, he says, will ensure that you says no to something, you’re left having to sell
25 to 30 per cent mark. The seven members essential that ethical businesses make healthy have enough money to reinvest in, and grow, to Coca Cola.’
76 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 77

CHaPter tHree
Emerging investment models
Introduction
Shiny and new
philanthrocapitalism
Philanthropy 2.0
RED BUTTON DESIGN
BRIGHT IDEAS TRUST
Equity for equality
Venturing into social action
MOTIV
CHARITY BUSINESS

Introduction
The past few years have seen a plethora of
Triodos is offering up to £750,000 and Bridges
is offering up to £1m. > 82 > 90
Alongside all this activity has been the
investment models emerging to support birth of social investment brokerage networks.
‘We do have enough ‘Following
money to solve the the crisis, it is
social enterprises. This chapter celebrates UnLtd, which provides grants and development
world’s problems. going to become
support for social entrepreneurs, runs UnLtd
what’s exciting right now Ventures, a consultancy that also acts as an
However, to actually obvious that you
deliver on social either change
investment broker. While exploring equity
and environmental the capitalist
options for social enterprises, the Office
solutions at scale system to include
of the Third Sector funded a research project
we have to enable greater social
into angel investors and in 2008 that turned
philanthropic and action, or leave it
into Equity Plus, a match-making service for
venture capital to to governments to
angel investors and social enterprises.
work together’ raise taxation and
At the same time, legislation is working in
redistribute wealth
favour of the sector. In the UK the community Antony bugg-Levine
and income’
interest company (CIC) was created some four of the Rockefeller
years ago. Companies set up using this legal Foundation talks Sir ronald Cohen,
Shiny and new
structure have an ‘asset lock’ which ensures about the emerging venture capital
that their assets can only be used to benefit area of impact pioneer, discusses
the community; they can also issue shares and investing the need for more
pay dividends. In the US the L3C was created quasi-equity
last year. As with the CIC it is a new type of
business structure specifically created for social > 86 investments in social
enterprises
WHy WOULD HSbC bANK , accountancy firm These are shiny new models and in recent enterprises. Its main objective is to make it easier
‘Demand is clearly
PricewaterhouseCoopers and City law
firm Nabarro all give up their time for free to help
years investors, advisors and even the government
have come forward eager to get involved.
for foundations to make programme related
investments into social enterprises as opposed
there; there are
currently more than
> 96
set up an investment fund? At one end of the spectrum, what might to straight grants.
a billion people ‘Nothing replaces
There are two reasons. The first is that the be called the softer side, there are the private All of these initiatives are less than four
without access to the greed of the
fund is run by Big Issue Invest, a subsidiary of equity firms Permira and SVG Capital which years old, most considerably less mature
safe drinking water. private investor
The Big Issue, the magazine sold by homeless have been working with social enterprise than that, and despite the fact that many
If we can service with equity as a
people to give them an income and build their self CAN since 2007 to provide growth capital social enterprises do need support to become
that market, it will reward when it
respect. So these influential firms are involved as well as hands-on support to a number of investment ready there are high hopes that they
result in profound comes to finding a
because the fund is linked with an important social enterprises. Neither private sector will use these new opportunities to grow.
social change’ risk partner’
cause – it shows they are giving something back partner asks for financial returns – the money Just as important as the emergence of these
to society. is given as a grant. new models is the will that has emerged – james brown rose Marley
Secondly, and just as importantly, this Moving along the scale, there’s the £100m and so far survived the dampening of the of Red Button Design, of Motiv explains why
stuff is exciting. They have offered expertise Department of Health Social Enterprise economy – for investors to get involved on which is backed by it’s difficult for a CIC
to establish a fund that it is hoped will attract Investment Fund, also set up in 2007 and now the ground and innovate. Good Deals 2008, all five of the BBC’s to attract investors as
£10m from investors to provide risk capital administered by Futurebuilders England, which the first-ever UK social investment conference millionaire investors financial rewards for
to help social enterprises grow. In contrast offers a mixture of grants and equity, loans attracted 300 people; the US-based Rockefeller in Dragons’ Den investors are capped
to traditional funds, this one will not be and loan guarantees – all aimed at catalysing Foundation has an initiative to get more people
based on big equity stakes and a five-year exit the creation of more health social enterprises. involved in investing for social impact; and
dh.gov.uk
strategy for investors. Instead, investors will Then at the other end of the spectrum the private bank, Coutts and Co reports that
FIND bigissueinvest.com
be invited to take a long-term view and the organisations including Big Issue Invest (BII), it has 18,000 high net worth individuals telling
OUT can-online.org.uk
fund will make use of emerging financial tools ethical bank Triodos and equity firm Bridges it they are interested in social returns and social
MOrE unltd.org.uk
that are capable of generating sustainable Ventures are offering equity capital to social entrepreneurship.
cicregulator.gov.uk
financial returns without damaging the social enterprises and expecting financial returns.
futurebuilders-england.org.uk
enterprises’ longevity or mission. BII is offering investments of up to £500,000, WATCH THIS SpACE
80 Chapter three: Emerging investment models Good Deals 2009: The Social Investment Almanack 81

Philanthrocapitalism
Picture: World Economic Forum
Philanthropy 2.0
Take hard-nosed business skills, mix with a genuine desire to do good and throw
in a need for financial innovation – welcome to the world of philanthrocapitalism
(although they’re still deciding upon the name), reports James Geary
ONE THING EVEryONE in the field net worth individuals – Warren entrepreneurs, ‘and they are looking
of philanthrocapitalism agrees on Buffett, Bill Gates, Jeff Skoll, and for feedback loops to determine
is that no one quite knows what Oprah Winfrey among them – has that social value is being created’.
to call it. Strategic philanthropy, decided not to wait until they are The recession offers both
venture philanthropy, social venture retired (or dead) to start investing challenges and opportunities.
capital, social investing, and slow in good causes. Recognising that The market meltdown shattered
money – these are just some conventional charity is not the only established investing orthodoxies,
of the variations on the theme of way, or even the best way, to achieve opening the way for alternatives
philanthrocapitalism, an investment social goals, they are pioneering an like philanthrocapitalism. But
method designed to deliver social approach that mixes the common it also made capital, for any kind
as well as financial returns. good with purposeful profit. of investment, much less social Bill Gates boosts his impact
Traditionally, people who These new philanthrocapitalists ones, scarce. Yet the problems by taking a market-based
approach to philanthropy
wanted to earn money made are ‘taking a market-based philanthrocapitalism is intended and he wasn’t shy in sharing
investments; people who wanted approach’, says Sally Osberg, to address – poverty, disease, and his advice at the WEF in
to do good made donations. president and CEO of the Skoll climate change – remain enormous. Davos, Switzerland, 2008
Now, a new generation of high Foundation which invests in social The bad news is ‘there’s not »
82 Chapter three: Emerging investment models Good Deals 2009: The Social Investment Almanack 83

Philanthrocapitalism
environmental solutions at scale the missing middle – businesses investors’ purse strings before they would allow Root Capital to lend since the Skoll Foundation is one
we have to enable philanthropic that are too big for conventional start tugging at their heartstrings. $121m a year, triple its current of its early investors.
and venture capital to work microcredit schemes but too small New Philanthropy Capital annual figure. Root Capital demonstrates
together. Neither the market nor (and too risky) for traditional (NPC), a charity that provides That money would benefit the power of combining hard
philanthropy can do it alone.’ commercial financing. The loans donors with information on charity some 350 farmers, artisan co- statistics with inspirational stories
business plans And that’s where will help small farmers boost performance, is one organisation operatives, and other grassroots of change.
need to connect with philanthrocapitalism comes in. productivity, which in Africa trying to devise those shared values. businesses representing roughly Ralph Catto, CEO of social
Bugg-Levine cites the partnership has been stuck at a quarter of the NPC has floated the idea of an one million households. It would housing specialist Scout Solutions,
investors’ purse between the non-profit Alliance global average for the past three association to rate the performance also make Root Capital’s lending says: ‘People don’t go to work to
strings before they for a Green Revolution in decades. Just as importantly the of non-profits, a kind of Moody’s programme fully self sufficient. drive earnings per share.’
Africa (AGRA) and Standard loans will help generate the kind for the social sector (but without ‘Profit drivers aren’t
start tugging at their Bank. AGRA works with poor of jobs and economic growth financial ties to the organisations motivators, but social drivers are
heartstrings farmers to boost income and that offer the fastest route out of it evaluates). The Rockefeller strong motivators. If you can put
productivity while safeguarding poverty and into self-sufficiency. Foundation is also exploring social drivers next to financial
the environment. Standard Bank Productivity and profit are ways to provide investors with goals, you can be as commercial
is the continent’s largest financial crucial to what Bugg-Levine objective assessments of social and as you would otherwise be but for
enough charitable capital in institution and this partnership, describes as impact investing, deals environmental impact. now giving is social benefit.’
the world to solve social and says Bugg-Levine, is an example of that provide commercial capital ‘Giving has always been seen And that is precisely what the
environmental problems at scale’, the shape of deals to come. AGRA to help people help themselves. as a disinvestment, a giving away,’
being seen as an current crop of philanthocapitalists
according to Antony Bugg-Levine. and its partners have put up a (US) How to measure the social says Martin Brookes, NPC’s chief investment, and is trying to achieve. More and
As managing director of the $10m loan guarantee fund against impact of investments is perhaps executive. more investors are beginning to
Rockefeller Foundation, one of which Standard Bank will make the sector’s biggest challenge. ‘Now giving is being seen as
people expect see their wealth as a way to tackle
the world’s foremost philanthropic ten times that amount, $100m, in Philanthrocapitalists agree that an investment, and people expect to know the return the planet’s most persistent social
organisations, he should know. lending available to smallholder the sector won’t mature until there to know the return, the mentality and environmental ills while at the
The good news is there is enough farmers in Ghana, Mozambique, are common standards against has to shift to the idea of same time turning a profit with a
capital in general to do it. Tanzania and Uganda. which investors can benchmark communicating what is achieved ‘The biggest risk of the purpose. Entrepreneurs are coming
‘We do have enough money performance. Just as the carbon with the money.’ recession,’ says the Skoll up with the business models that
to solve the world’s problems,’ tHe MIssInG MIddle offsetting market has coalesced Root Capital has successfully Foundation’s Osberg, ‘lies in can deliver social and financial
says Bugg-Levine. ‘However, Agricultural enterprises like around the value of a displaced ton attached financial metrics to its becoming more risk averse’ – and returns. The next step is for the
to actually deliver on social and these comprise what is known as of carbon, the philanthrocapital social impact. By offering short- Root Capital is a case in point. Given sector as a whole to devise the
market must coalesce around its term working capital loans as the state of the economy, investment metrics that will transform what is
own definitions of value – in terms well as longer-term investments, funds are operating with constrained now a social investment oasis into
of jobs created, taxpayer money the social enterprise has helped resources. That forces investors to a fully-fledged ecosystem.
ThE WInnIng formulA saved, lives changed. create several hundred sustainable be more selective in choosing which Though philanthrocapitalism
‘Measurement is essential,’ businesses in Africa and Latin projects to support, but it can also may go by many different names,
says Daniel Brewer, director of America, positively affecting the insulate them from real innovation, everyone knows it when they
Resonance and Equity Plus, lives of hundreds of thousands from the breakthrough ideas and see it. Wherever ‘an intractable
two philanthrocapitalism of people. Its loan repayment rate equilibrium-busting entrepreneurs problem becomes a solvable
consultancies. is 99 per cent; its repayment rate that can really make a difference. problem,’ as Osberg puts it,
He says entrepreneurs and to investors is 100 per cent. ‘We want to preserve some philanthrocapitalism is at work.
investors alike need to ‘drill headroom so we can
down into the quality and a $63M CaMPaIGn respond when a great
$63m Root 1m A new type rockfound.org
quantity of their social impact, Despite the recession, Root opportunity emerges,’
philan- Capital, an families of finance FIND agra-alliance.org
put values alongside that, then do Capital recently launched a Osberg says.
thropic outstand- with for the OUT philanthropycapital.org
their storytelling around those campaign intended to raise $63m Evidently, the new
equity and ing social better lives developing MOrE rootcapital.org
numbers’. In other words, business in philanthropic equity and debt Root Capital fund was
debt capital enterprise world scoutsolutions.co.uk
plans need to connect with capital over five years. The funds such an opportunity,
84 Chapter three: Emerging investment models Good Deals 2009: The Social Investment Almanack 85

Philanthrocapitalism
Brown and Jones:
committed to
making profits for
social change
IN
PRACTICE
red Button desIGn
Words: James Geary
THE COMpANy’S NAME comes from their tracks when they managed reverse osmosis sanitation system
those big, bright emergency stop to inspire all five millionaire (ROSS), a portable water filtration
buttons in lifts and on escalators. investors in BBC TV’s Dragons’ system on wheels (pictured above).
The emergency Red Button Design Den to offer investment to them In Sub-Saharan Africa, the
is trying to stop: preventable for a fraction of the equity the average distance to safe drinking
diseases caused by unsafe water ‘dragons’ usually ask for. The water is about six kilometres.
supplies in the developing world. dragons said they were so inspired ROSS consists of a 50-litre
Founded by product design by the social element they were tank, a pump, and a simple filter
engineering student James willing to take lower returns. system. Users roll ROSS to the
Brown and marketing consultant Now the company is working water supply, and on the return
Amanda Jones the youthful to build a global co-operative journey the rotation of the wheels
entrepreneurs stopped everyone in to manufacture and market the powers the pump, which pushes
FIND OUT MORE www.thisisredbutton.co.uk
ThE WInnIng formulA
the water through the filters. By Red Button Design takes the ‘We need to prove we can
the time ROSS is rolled back orders and pays co-operatives in make a profit in order to get the
to the user’s home, the World countries like Malawi and Ghana investment we need to take the
Health Organization’s daily to manufacture the units. The co- business forward.’ Demand is
recommended allowance of 50 ops also get shares in Red Button clearly there; there are currently
litres of clean water is ready to go. Design, so the company’s success more than a billion people without
Brown says he and Jones already benefits them too. access to safe drinking water.
1 clever Five 1.2bn Huge Profitable Healthier and
have 45,000 pre-orders, mostly ‘Making a profit is important ‘The market is huge,’ Brown
gadget famous people market enterprise richer people in
from NGOs, and there is also from an investment and says. ‘If we can service that
investors without the developing
interest from multinationals like sustainability point of view,’ market, it will result in profound
(among others) clean water world
Procter & Gamble. Brown says. social change.’
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Philanthrocapitalism
IN
PRACTICE
BrIGHt Ideas trust
Words: James Geary
AMArIyAH rAHEEM WOULD never
FIND OUT MORE www.brightideastrust.com
have received start-up capital from
a traditional source. Having fallen ThE WInnIng formulA
out with her family as a teenager,
Raheem knew she had a talent for
hairdressing, so she decided to open
her own salon to support herself.
The Bright Ideas Trust (BIT),
a charity set up by Tim Campbell,
the first winner of BBC TV’s The
Apprentice programme, invested
£12,000 in Raheem and provided 1 inspiring £12,000 business
her with a mentor from the health individual mentoring Amariyah serves as a kind of fund manager,’ ‘Just as a venture capital fund
and beauty industry. In her first Raheem Campbell explains. often appoints a director, BIT appoints
three weeks in business, Raheem launching her ‘We want these companies to a mentor,’ Campbell says. ‘Mentors
hairdressing
generated £3,000 in turnover. She salon in summer buck the trend of businesses that are business owners, working directly
now employs four staff. 2009 with Tim fail, so they can pay back their loans with the entrepreneur to teach them
BIT is a charity, but it doesn’t Campbell (left) and I see a return on the equity how to run it.’
follow the conventional charitable and the Mayor stake. I’m as incentivised as the Campbell admits his charity’s
model by giving grants. Campbell of Islington entrepreneur to make it successful.’ name is something of a misnomer:
supports young entrepreneurs in In the process, of course, the ‘It’s not the ideas that are always
5 years Loan Solid Money to
deprived inner-city areas with a mix founders of these small firms are bright. They are mostly just normal
repayments business in re-invest in
of loans and equity. creating income for themselves and business ideas. It’s the individuals
disadvan- the next young
‘The business model is based jobs for others. Mentoring is a key who are bright. We’re looking for
taged area entrepreneurs
on venture capital, in which BIT part of the proposition. investable individuals.’
88 Chapter three: Emerging investment models Good Deals 2009: The Social Investment Almanack 89

equity for equality
Photo: Amaya Roman
Venturing into social action
ronald Cohen, the father of venture capital in Europe, has turned his attention to
social investment – and is currently focusing on a new fund to create substantial social
enterprises. he talks to Ian Allsop about why the time for action is now
DESpITE A GrOWTH of interest The Bridges Social executive chairman of Apax, is
in social enterprise, as this Entrepreneurs Fund (BSEF) Bridges’ non-executive chair.
Almanack has frequently was launched last November Bridges runs two Community
acknowledged, a barrier to it by Bridges Ventures. Founded Development Venture Funds
achieving social change on a in 2002, Bridges is a private totalling £115m. These invest
significant scale remains a lack investment company whose equity in ambitious businesses
of capital. However, a new founding principle is that all of that are located in the most Cohen:
fund for social entrepreneurs its funds aim to achieve social deprived 25 per cent of the country taking action
to create
is just one of the ways that goals as well as financial returns. and sustainable businesses whose a greater
venture capital guru and social It is backed by private equity social impact is intrinsic to supply of
investment champion Sir Ronald companies Apax Partners, what they do, especially in the money to the
Cohen hopes to help the sector 3i and Doughty Hanson. Cohen, areas of education, healthcare and social sector
start to realise its full potential. founding partner and former the environment. »
90 Chapter three: Emerging investment models Good Deals 2009: The Social Investment Almanack 91

equity for equality
‘BSEF aims to bring equity, surplus it generates into other The common feature will be that bank and building society accounts favour of these initiatives but the
or quasi-equity, capital to such social enterprises. they are starting immediately rather for over 15 years (as detailed in commitment to provide funding
mission-driven organisations. If Investees will have access to than spending a number of years the Dormant Bank and Building and the tax incentives required
a social enterprise wishes to tackle consulting advice from Monitor raising the funding they require. Society Accounts Act 2008). is slow in coming. It is one thing
the problem of re-offending, but Group and help from UnLtd, the Cohen founded Apax Partners Back in 2005, Cohen was thinking it’s a good idea and
following the crisis, needs to become an organisation foundation for social entrepreneurs, in 1972 and is regarded as the father quoted as saying that he saw ‘a new another thing signing on the dotted
you either change capable of tendering for to become investment-ready. of private equity in Europe. He is a wave of social entrepreneurship line. It just needs to be given the
government contracts, for example, BSEF expects to attract parallel founder director and past chairman emerging in the UK’. We are now highest priority in dealing with the
the capitalist system BSEF can inject significant equity funding from other trusts and of the British Venture Capital in a very different economic climate social consequences of the crisis.’
to include greater investment to support the venture.’ foundations, and hopes to Association, and a founder director but he retains his optimism. Indeed, Another major challenge for
announce its first investee shortly. of the European Venture Capital he believes that the downturn the sector identified by Cohen
social action, or leave sCalInG uP The idea arose from demand Association. He has been aware of could provide a boost to the sector. is defining and measuring social
it to governments to Specifically, BSEF will invest in for such support from social the need for social investment for ‘There is a greater need for impact. However, he does feel that
social enterprises that have a entrepreneurs seeking sustainability some time. However, it was only social investment and many more there have been developments in
raise taxation and clear social mission (embedded which could not be achieved by when he was asked by the then people interested in getting into this tricky area.
redistribute wealth in their legal structure), the ability relying exclusively on donations. chancellor Gordon Brown in 2000 the field,’ says Cohen. ‘Some have
to scale up their social impact, Bridges envisages that some of to chair the Social Investment made enough money working for MeasurInG IMPaCt
and income a financially sustainable model these social enterprises will be Taskforce (to examine ways that financial institutions and they ‘Big strides have been made in
and a strong management team. charities with proven products and wealth could be created in the UK’s want to put something back.’ social impact measurement,’ he
Each investment will usually be services wanting to expand their poorest communities) that he began However, the difficulty is that says. ‘At Bridges we have worked
However, with the BSEF, in the form of equity with organisation, while others will be to look at the area in depth and government finance is currently very hard and made progress in
Bridges hopes to take things a step a reasonable financial return. social entrepreneurs wishing to kindle a passion for the sector. very stretched at exactly the time identifying metrics which every
further. The fund was launched BSEF is bound to re-invest any establish a new social enterprise. when it needs to be playing an portfolio company has to track in
in November 2008 with funding a neW Goal enabling role to get a market in order to calculate the multiplier
of £4.25m raised from a range He stepped down from Apax in social investment off the ground. of economic activity generated by
of investors including NESTA, 2005 and the goal of significantly ‘This is where we have a an investment.’
the Generation Foundation, ThE WInnIng formulA developing the social investment frustrating time. Government is in He feels that research has
Lehman Brothers Foundation market was by then one of his focused too much on trying to find
Europe, Deutsche Bank and 3i driving ambitions. a single measure for social return
as well as private donors including As well as his Bridges equivalent to the internal rate of
Cohen himself, Nigel Doughty, involvement Cohen is chairman return for finance.
Harvey McGrath and the Bridges of the Commission on Unclaimed ‘It still seems elusive but any
Ventures team. Assets (which is considering self-respecting social organisation
BSEF aims to address the how to make use of money in the There are plenty of should have one or more
funding gap faced by fast growing Public Private Institu- £4.25m UK’s dormant bank accounts) performance measurement metrics
social enterprises. Cohen pinpoints capital capital tional BSEF and a past honorary president of
potential investors as, increasingly, raising capital will
that what makes BSEF different capital fund the Community Development who have a social depend on proving you are doing a
is that it is the first fund aimed at Finance Association. He is also a good job.’
scaling up social enterprises into non-executive director of Social
conscience and who With such extensive experience
substantial organisations – offering Finance, an organisation whose would accept a lower of, and commitment to, social
up to £1m in investment. ambition is to transform the ability investment it is fascinating to hear
‘It is different from traditional of third sector organisations to
rate of return as what Cohen thinks when asked
philanthropy because the social get the capital they need to grow long as their capital what other emerging areas we should
enterprise models we want to Larger More Returns A new type sustainably. Social Finance is one look out for.
back have a revenue generation social positive for of equity of the most vocal advocates of
was being used for a ‘Keep an eye on the money,’
capability consistent with enterprises impact investors establishing a social investment purpose they support he says. ‘Follow where additional
their social mission,’ says Cohen. bank with funds left dormant in capital is flowing into social »
92 Chapter three: Emerging investment models Good Deals 2009: The Social Investment Almanack 93

equity for equality
enterprises and successfully making increase tax rates, which actually
a greater impact. raises less tax at the end of the day
‘However, if only the same than levying reasonable taxes on a
amount of capital flows as is faster growing economy.
flowing today, we will not ‘But most governments may
see significant change. The come to the conclusion that the only
We are only going to
reason behind setting up Social way out of the crisis, and sailing increase significantly
Finance and establishing a social between deflation and inflation,
investment bank is to attract is along the path of growth. This
the flow of banking
capital from the markets by will require strong entrepreneurial finance into deprived
utilising financial and social sector incentives for business and
expertise to direct funds where governments will have to endow the
areas through this
they can make maximum impact. social sector with the means to do type of legislation
‘It is not like mainstream social aspects of the job.’
venture capital and private equity Cohen sees a general cross-
where financial return attracts the party consensus in developing the
money. You need an organisation market for social investment. on Unclaimed Assets Report in
to act as a pump. There are plenty ‘It is not about party politics, 2000 we said that if in seven
of potential investors who have a but a policy issue that Labour, years we hadn’t made progress
social conscience and who would the Conservatives and Liberals without legislation, we would
accept a lower rate of return as long are all taking very seriously. It need it. Despite the fact that
as their capital was being used for is about the lives of people, the banks do have a social conscience,
a purpose they support, but they structure and cohesion of society have supported Bridges and been
need an organisation to make the and the social and economic generous with their time in helping
capital market mechanisms work. efficacy of the capitalist system, the companies we have invested
‘Ultimately, unless there is a which all parties espouse.’ in, I believe we are only going to
greater supply of money, the social Former communities secretary increase significantly the flow of
sector won’t be able to cope with Hazel Blears’ comments in summer banking finance into deprived areas
the problems that the downturn 2009 suggesting tougher regulation through this type of legislation.’
is creating.’ on forcing banks to reinvest in And is there an opportunity
disadvantaged communities, based here for banks to try and regain
PolItICal aCtIon on the Community Reinvestment some public favour?
Generally, Cohen echoes the Act in the United States, has ‘I think the United States
enthusiasm for social investment that echoes of the debate around experience suggests that banks have
he has voiced over the last decade. banks being encouraged to release gained some goodwill through their
‘Following the crisis, it is unclaimed assets and is something CRA activities but they have also
going to become obvious that you the Social Investment Taskforce discovered that they can do valuable
either change the capitalist system has focused on. business in poorer areas.’
to include greater social action, While recognising that
or leave it to governments to raise Blears has now moved on and
taxation and redistribute wealth her statements reflect the current
and income. negative populist
‘The second route stifles sentiment towards the
bridgesventures.com
growth in the economy because it banks, Cohen insists
FIND enterprising-communities.org.uk
reduces incentives for hard work it is a central issue.
OUT unclaimedassets.org.uk
and risk taking. Some governments ‘When we wrote
MOrE
will give in to populist pressure to the Commission
94 Chapter three: Emerging investment models

equity for equality
IN
PRACTICE
MotIV
Words: Ian Allsop
ONE prObLEM THAT community Venturesome, the social local authorities and schools. Nine months on, co-founder
interest companies (CICs) face investment fund of the Charities However, to win this and director Rose Marley admits
is getting significant investment Aid Foundation, offered an investment Motiv first had to that if it had not got the investment
as the asset lock and dividend cap unsecured loan of £190,000, secure an award from UnLtd, the when it did, Motiv would not exist
(the legal regulations ensuring which helped Motiv hire more foundation for social entrepreneurs, in its current format.
that the companies’ assets benefit staff, thus increasing its capacity which amounted to £30,000 ‘We had reached a limit of what
the community) restrict the level to secure further contracts from plus business advice and support. could be achieved with organic
of return to growth. The CIC structure has Motiv rewards
an investor. limitations as the financial rewards young people who
In September FIND OUT MORE www.motiv.org.uk for investors are capped,’ she says. have 100 per cent
2008, a Marley is primarily driven attendance as
Manchester ThE WInnIng formulA by a passion for building social well as those who
improve the most
CIC called enterprise and improving social
Motiv, which mobility rather than improving
encourages school attendance per se. She and
young people co-director Lee Stanley chose it £800m – and this measurement Venturesome and UnLtd. As
to attend school as an area to work in because helps create a sustainable such co-operation can generate
by offering it has such extensive implications. and successful social business. real impact for the social
badges and Better school attendance equals But she says that it is a real enterprise and for society in
rewards, bucked more chance of graduating and issue getting proper funding for general, Marley emphasises that
1 project Potential £220,000 Up to £2.5m saved
the trend less chance of turning to crime. social enterprise, as investors are investors who understand and
to keep savings 200,000 for taxpayers
by securing It is also easily measurable – in the largely risk averse. support social investment need
kids in school to society of people
investments UK there are 200,000 persistent A crucial part of the success to work in partnership and share
£11.60 per with better
worth truants every year with an of the Motiv investment was their learning to strengthen the
£1 invested life chances
£220,000. estimated cost to the economy of the complementary nature of whole sector.
96 Chapter three: Emerging investment models Good Deals 2009: The Social Investment Almanack 97

equity for equality
Photo: istock.com/ forgiss
IN
PRACTICE
CHarItY BusIness
Words: Chrisanthi Giotis
THIS SUMMEr TrIODOS bANK ago but found little interest in the to 200 – in the next two years.
announced a £320,000 venture relatively small investment the Freeman says that even if he’d
capital investment in social company was seeking. been offered the £320,000 as a
enterprise Charity Business. The But this year, with clear signs grant he would have chosen the
investment is via the Triodos that the business was likely to be venture capital route because of the
Opportunities Fund which was swamped with demand as charities knowledge Triodos will bring to
opened to investors in mid-2008. sought to outsource more of their his organisation. Triodos will have
As a company that provides operations Freeman looked again. a member on the Charity Business
outsourced financial services The deal with Triodos is the board as well as an observer.
and advice to charities, Charity culmination of five months of talks. Freeman says he envisages
Business CEO Mark Freeman As a result, the social enterprise three possible exit strategies
is well-versed in the concept of hopes to double the number of – a listing on the Alternative
venture capital. In fact he had charities it helps with financial Investment Market, a sale to a like-
looked for venture capital five years services and advice – from 100 minded business or for Charity
Business to buy out elements of
FIND OUT MORE www.charitybusiness.com Triodos’s share holding.
He anticipates that working
ThE WInnIng formulA with a large organisation like
Triodos will open doors.
Triodos Opportunities Fund
manager Whitni Thomas says:
‘Investing in Charity Business
makes good sense commercially.
This an excellent example of a
business balancing financial and
social goals in helping boost the
£320,000 Investor 1 growing 200 charities
efficiency and professionalisation
capital support social running
of the charity sector. Charity
business stronger
Business is well positioned to meet
organisations
this growing demand.’
98 Chapter three: Emerging investment models Good Deals 2009: The Social Investment Almanack 99

Perspective
with Jeremy, we attempt to drill into the key Because being able to explain this to
issues of what impact and value really mean, customers and relate the value to some of their
why they are important and the tools available other objectives can change specifications
to measure them. before tenders are issued, making you more
competitive.
Good Deals Almanack: What do you mean
by ‘impact’ or ‘value’? There seem to be lots of ways to approach
Jeremy Nicholls: By impact I mean the change this. Can you take us through the main ones?
that your activity makes happen. By value I The last report I saw said there were 130 – and
mean the value of that change. this is part of the problem.
The assumption is that the price you pay The good news is that there is convergence
Impact, value and social
for something is its value but activity often and migration within methods towards more
has impacts that have not been accounted for consistency. It is important that we should
in the price. In the private sector the focus for emphasise what they have in common
return on investment
sustainability reporting started with more of an and how they are converging. Increasingly,
emphasis on negative impacts and how they were the frameworks developed by those such
being managed, particularly on the environment. as the Global Reporting Initiative, the
In the social sector it has been on positive impacts AccountAbility standard, the Social Audit
where impacts are not accounted for in the Network, and the SROI Network – alongside
price as there is often no market – for example, frameworks such as cost benefit analysis –
WE ArE USED TO looking at the price of an deliver social, economic or environmental in projects to address social exclusion. share the same principles.
item or service to see whether it is good value. change. Its aim is to collect and publish So, either there is no market or the price I think we can also separate frameworks
But this doesn’t give us the full picture. statistics on both growth and impact – in in an existing market misses impacts on some to understand value from specific tools
It doesn’t show if there is an environmental a way that will help inform those who want people. However, to manage risks, seek out that the use of these frameworks requires.
cost – perhaps if the item has been flown to make well-judged social investments. opportunities or align activity with objectives For example, using SROI (which can be
thousands of miles to reach the shop we see it Government has also made this area we need to measure these impacts. summed up as an approach to understanding
in. Nor does it indicate a human cost – were the a priority. The Office of the Third Sector and managing the impacts of a project,
people involved in producing that item paid and (OTS) in the Cabinet Office is running a new Why is it important for a social enterprise to organisation or policy) may identify changes
treated fairly? project on Measuring Social Value which is demonstrate this? to the local economy as an outcome, while
Social enterprises aim to be competitive being taken forward between 2008 and 2011. Because, if they are in the business of changing LM3 may be a good tool for measuring
in the marketplace. But, for a social business, The Scottish Government is also running people’s lives, they need to know if and how the change (Local Multiplier 3 is a tool
providing evidence of social impact takes on a project to develop, promote and support they are doing so. developed by the New Economics Foundation
special significance. the use of SROI (social return on investment). Because organisations with objectives that enables you to measure how much
Consumers and procurers of goods and Jeremy Nicholls, chief executive of the need information systems that support those your organisation or initiative impacts on the
services are becoming more aware that price, SROI Network, one of the bodies leading objectives. local economy).
by itself, doesn’t give them all the information the research in the UK and Scotland, is Because customers and investors are
they need to make a judgement on value. In advising the RBS SE100 Index and has led increasingly asking for it. Tell us about SROI and the work you are doing.
the world of finance, too, there’s a growing the work on a new guide to SROI, published Because as the sector increases in scale the SROI is an approach to understanding and
body of people who are starting to apply a in May 2009 for the Cabinet Office. Nicholls issue will become more important since private managing the impacts of a project, organisation
wider set of values to how they invest. says that, ‘in much the same way as during businesses, with which social enterprises or policy. It is based on stakeholders and puts
A number of initiatives are working to the early days of financial reporting and will compete, also create positive social financial value on the important impacts
address this issue of how to value things in a accounting, we need standard approaches environmental and economic impacts. identified by stakeholders that do not have
different way. For example, the RBS SE100 to understanding and managing social value, Because understanding impact can help traditional market values.
Index, launched early in 2009 by Social in order to unlock more investment manage risks and identify opportunities – for The SROI Network is a network dedicated
Enterprise magazine, is a tool that charts in organisations that create social value’. new products and services and new ways of to the consistent and effective use of SROI. It
the growth and impact of organisations that Here, in a question and answer session increasing social value. is a membership organisation with members »
100 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 101

Perspective
The project has several aims: How do we compare different organisations Is the idea of measuring social return
if there is no standard way of doing this? politically vulnerable, given upcoming
• tandardise the approach to using SROI.
S There is a difference between a standard elections – are other political parties broadly
way – and, as above, there is increasing supportive?
• ncrease the accessibility of SROI
I consistency here – and a standard list of At some point in most measurement systems,
for social investors and third sector indicators. How much you can compare whether accounting or weights and measures,
organisations. depends what you are planning on using the legislation is required. Legislation also
comparison for. requires there to be enough consistency and
• evelop a network of practitioners who
D If we have a standard process then agreement in what the measurement system
will raise awareness of SROI and social different indicators will result for different is. Government can encourage people to
reporting. situations, but we can compare how they become more consistent and, as far as
have applied principles in understanding I know, other parties would be supportive of
• ncrease the evidence base of the impact
I impact and value. This is no different from consistency. The question is then when and
of the third sector comparing businesses’ financial results – even how legislation would be appropriate.
though they use the same method, the results
• nable social enterprises and other third
E still need analysts to understand different What are your aims for this agenda over the
sector organisations to prove the social risks in different sectors. next five years?
value they create. Essentially, we want organisations from all
What’s the point of demonstrating how great sectors to be able to use these tools to achieve
• S
upport social investors and commissioners your impact is if nobody cares? greater change in society.
of public services to make more intelligent None. We are aiming for standardisation
investment or purchasing decisions. and general acceptance of the principles
So who should care and why? that underpin accounting for social value.
The project also aims to encourage wider Anyone concerned by the fact that despite We want a big increase in the number
who are practitioners, academics, funders use of SROI, through making it more accessible increasing GDP, inequality is also increasing. of organisations that account for value
and investors with an interest in the use and and more cost effective for organisations More and more, investors, commissioners, (throughout the value chain).
development of social return on investment. and more attractive to investors, funders and customers and beneficiaries are also showing We want to ensure that much more time
The growing membership is led by accredited commissioners. that they care. We must continue to argue is spent at board meetings on comparing
practitioners who have pioneered SROI in Forth Sector Development and the that part of the reason for the disconnect social value performance against budget as
England, Ireland and Scotland. SROI Network and have also launched the between growth and inequality is that our well as financial performance against budget.
The Office of the Third Sector (OTS) Scottish government’s SROI Project, which systems of accounting for value are no longer
and the Scottish Government recognise aims to develop, promote and support the appropriate for the challenges we face.
that demonstrating added social, economic use of a standard form of measuring social
and environmental value is important for return on investment across the social How do initiatives such as the RBS SE100
third sector organisations and their funders, economy in Scotland. Index fit into this agenda?
thesroinetwork.org
investors and commissioners. It is also Initiatives such as SE100 are revealing how
FIND se100.co.uk
becoming increasingly important for the What about social accounting and social organisations are using these methods, and
OUT neweconomics.org.uk
public and private sectors. The OTS has auditing – how do they relate? benefiting from demonstrating their impact.
MOrE ces-vol.org.uk
therefore funded a three-year programme These approaches are very similar and SE100 is a way of encouraging organisations
philanthropycapital.org
on measuring social value. The work began the SROI Network and the Social Audit to consider how and why they understand
ncvo-vol.org.uk
in November 2008 and is being delivered Network have worked together to harmonise and manage the value they create. It highlights
socialauditnetwork.org.uk
by a consortium of organisations: the SROI principles and are planning on working those organisations that invest in this area.
accountability21.org
Network, New Philanthropy Capital, the together on the audit of SROI reports. The Over time, we would hope to see a general
globalreporting.org
New Economics Foundation, Charities main difference is that SROI has more of a increase in the scores posted on the SE100
cabinetoffice.gov.uk
Evaluation Services and the National Council focus on the outcomes of an activity and on Index relating to social impact, perhaps to the
scotland.gov.uk
of Voluntary Organisations. the value of these outcomes. extent that we need raise the bar.
102 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 103

Perspective
institutionally mediated, such that there Missing are banking systems which provide
is no direct connection between social and platforms to channel and direct capital flows.
economic needs and the supply of money. The capital market for social finance
Rather, NGOs, civil society and social is substantial: in the US alone this market
organisations have to apply to grant-making creates an annual turnover of US$1tn – and
foundations for support, submitting to even then there is a considerable annual
different concepts of social impact and shortfall. Many organisations with the
theories of change. potential to grow are unable to do so because
An individual looking to participate they cannot tap into an easy-to-access capital
in the philanthropic sector is faced with market. This means that there is not enough
a bewildering array of players. In many capacity to really resolve social issues.
countries the process of non-profit Almost all non-profits have to spend too
registration is complex or ad hoc, and it may much of their time and resources trying to
not even be possible to identify social purpose raise money rather than pursuing their core
A market for giving
organisations. There is often a divide between missions. The cost of such fundraising can
small, local organisations and those that be as high as 50 per cent. More complexities
work nationally or internationally. In either are added with the short-term nature of
case, it is difficult to assess the impact of any
organisation. Social funding decisions are
often based on limited information, personal
The philanthropy of the future is a What are some of the main weaknesses in interest and emotion rather than being part
the system? Whether the amount of funding of a strategic approach. This can leave funders
massive market with great potential to
provided to governments and NGOs for frustrated as to how to make their mark
address the world’s problems, but work development is enough or too little is hotly on history.
debated. Yet almost everyone would agree Furthermore, from the perspective
looking at the social
needs to be done on the missing capital
that a major problem is the distribution of many recipients of financial support – sector through the
mechanisms and our own opinions and effective use of the money. There is NGOs, nonprofits, social entrepreneurs,
disturbing evidence that this money often philanthropic organisations – there is
capital market lens
on what is a good investment, write
does not reach the people most in need, where ongoing long-term funding uncertainty. is helpful: from this
Arthur Wood and Maximilian Martin it is crucial for social change. For example, Some grant making foundations move
corruption and capital flight are two of the with the investment fad of the moment, or
perspective the social
most serious contributing factors to the depend strongly on the preferences of a key sector looks like a
ineffectiveness of aid transfers. staff member whose departure from the
UNDEr TODAy’S STrUCTUrES of international Private grant-making foundations have organisation can result in funding drying up.
capital market with a
finance there are two primary, formal significantly increased in scale and visibility Unless we look for creative solutions, the missing link – banks
mechanisms through which funding gets in recent years. They are often seen as much current allocation processes will be incapable
directed towards the many social issues better intervention agents given their political of addressing the pressing social problems
across the globe. The first is multilateral independence and their capacity to make currently experienced through the world.
governmental models that are resourced more long-term funding commitments. But most funding and the complexity of having
through national taxation. The second model with the exception of the top philanthropic A MArKET WITH MISSING LINKS to manage multiple funding sources with
is large private grant-making foundations. foundations, which in some cases surpass Could the mechanisms of the financial different terms, different reporting schedules
But as the pace of globalisation increases, governmental organisations in scale of their market provide solutions to such weaknesses? and different monitoring requirements.
these models are proving to be inadequate in financial support, most foundations operate Looking at the social sector through the The commercial banking sector performs
their ability to tackle effectively such social in a system which is akin to a fragmented capital market lens is helpful: from this the function of raising capital in the private
issues as education, economic development, merchant banking system. The relationship perspective the social sector looks like a sector, providing a more cost effective and
health, human rights and poverty. between demand and supply of finance is capital market with a missing link – banks. more coherent institutional arrangement. »
104 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 105

Perspective
These developments and innovations can mechanisms could be created that provide with the citizen sector, non-profit
be linked to a growing interest in social a positive economic return for an investment organisations, and civil society organisations
investment from potential investors. In the where the underlying investment loses money. • Ensuring effective implementation of the
US alone it is estimated that the largest In the past few years, both institutional processes to address social issues
The largest transfer transfer of wealth in human history, of the and retail investment clients have been • Defining clear benchmarks of success to
order of $41tn, will take place in the next 50 educated in a range of financial products with allow further injections of capital.
of wealth in human years, resulting in a huge social investment differing economic returns, sometimes even
history is estimated to potential connected with the ability to with guaranteed returns. In the institutional Although in their infancy, many of these
manage capital risk at increasingly smaller space collateralised debt obligations and hedge models and mechanisms are already in
take place in the next capital amounts. funds have seen phenomenal growth. In the existence, either in the private sector or in the
50 years resulting There have been changes spurred private client sphere this development has philanthropic sector. They need to be brought
on by globalisation: market models for been mirrored in structured and guaranteed to scale. This requires co-operation between
in a huge social the social sector have gained much more products. There is no practical reason why governmental, commercial and philanthropic
investment potential credibility and globalisation has generated some of these ideas cannot be applied to social sectors, by targeting capital to the people most
new opportunities driven by the growth of and economic return. in need. This will in turn empower people and
technology, specifically mobile technology. communities who are currently marginalised.
The result is a confluence of social and CrEATING THE MECHANISMS FOr MArKET- It is time to unleash the power of the market
MAKING A DIFFErENCE EFFICIENTLy economic factors encouraging this growth of bASED SOLUTIONS and private capital on the most pressing social
There are clear signs of a shift in the allocation the market system in philanthropy. It is clear that there is an inefficient capital issues of our time.
of social capital finance – new allocation Such factors could encourage banks to market for social finance, at the levels of the
processes driven mainly by market mechanisms enter this huge but inefficient capital market state, the non-profit sector and the private
to efficiently target capital to tackling the and to perform their core function – the sector. Traditional banks are not involved, arthur Wood heads
most pressing and serious social issues. This intermediation of capital to the benefit of both and the potential efficiencies that the private the social financial services
can be seen practically in a number of ways: their clients and the social capital market. sector could offer are not currently brought at Ashoka, bringing over
into play in any significant way. At times it 20 years of experience
• The global growth of social purpose CHANGING SCHIzOpHrENIC VIEWS seems as if the philanthropic sector relates in the finance sector with
organisations in the last ten years has not For this development to accelerate, funders to the big picture, but primarily operates in a a number of banks and
only led to some of the above-mentioned and social investors have to move away from small scale when compared with other sectors pension funds to his work on social investing.
problems, but has also resulted in many the somewhat schizophrenic view that they of the global economy. He delivers insight into how investors can
cases in innovative and cost-efficient sometimes hold: as donors, they are often Given the need for market-based solutions, use their capital to increase the flow and
delivery of social services to the happy to make grants which provide an Ashoka has decided to work with others in efficiency of financing to the social sector and
developing world and underprivileged allocation that has a minus 100% return, or developing the key elements of a solution. helps social entrepreneurs understand how
sectors of society at much lower unit cost. zero financial return, while as investors they Such a solution must mobilise the substantive to engage with the mainstream capital markets.
• The growth of social entrepreneurship prioritise how to make financially profitable knowledge of banks in the field of commercial
and similar movements has unleashed investments. finance, creating processes that allow the dr Maximilian Martin serves
the power of creative and ethical This is counter-intuitive in investment aggregation of capital and the deployment of as senior fellow and lecturer
entrepreneurship on the social sector, terms. In terms of market efficiency, clearly the capital on a scale that will change the nature of at the Center for Social
advancing social change with the same range of ‘best practice’ in social and economic social financing. In particular, this requires: Innovation at the University
entrepreneurial drivers one would see in terms would be between these two points. of St Gallen, and as a visiting
the private business sector. There are certainly some social investments • Creating mechanisms that bring full professor at the University
• The rise of microfinance, the growth which may never provide a direct positive transparency to the market of Geneva, where he teaches in the
of venture philanthropy and concepts return in economic terms, though they may • Creating transparency by drawing together International Organizations MBA programme.
such as triple-bottom-line investing or contribute to economic progress overall, such as players that can aggregate demand on clear He conceived and set up UBS Philanthropy
sustainability indices have started to democratic development and the upholding of platforms – where the risk can be defined to Services and its UBS Philanthropy Forum,
introduce new financing mechanisms for human rights. But, paradoxically, making use the best available abilities serving as UBS Philanthropy Service’s founding
social development. of skills already available in the capital markets, • Engaging the corporate sector in tandem global head from 2004-2009.
106 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 107

are you an se100 business? CHaPter Four
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Exploration and experimentation
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Whether a CIC, charity, social firm, community enterprise,
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Introduction
Social finance futures
A social investment bank
A brighter form
of banking
A social stock exchange
The enterprise, the
investor and the exchange
Social impact bonds
Building bonds for
a better society
The role of remittances
In partnership with Money makes it round
the world

Introduction
Exploration and experimentation are always
There are lots of other ideas bubbling up
just now. The creation of a social investment > 112 > 120
bank, acting as a wholesaler of capital and
needed to push things forward. In this chapter providing finance and advice to social
‘We are familiar ‘The social impact
with social bond is a social
we profile some current ideas that could investment specialists, is being actively pursued
enterprises investment
by the government. And the notion of social
turn out to be the future of social finance impact bonds is gaining ground.
pursuing social approach that
and environmental generates savings
Remittances, payments sent from migrants
impact, so how for the taxpayer
in the north to their families in the south, have
about a financial through improved
long been acknowledged as a powerful tool for
institution which social outcomes
development. A new financial structure being
mirrors this at a rather than service
created by pioneering microfinance institutions
macro level?’ cutbacks’
will make sure that the true potential of this
money is realised. Social Enterprise Toby Eccles
None of these initiatives is being developed reporters of Social Finance
in a vacuum, and in the current environment the investigate the talks about a
term financial innovation could be a double- proposed social pioneering new idea
edged sword. More people can see the value of investment bank
Social finance futures a new form of ‘creative capitalism’, with social
good as its goal, but we live in a time where any
financial innovation is liable to be held up as the > 116
> 126
‘What makes
first step towards another market crisis.
‘I think the timing is microfinance
But there is a world of difference between
right for the launch institutions
SOCIAL ENTrEprENEUrS AT THEIr bEST create fund listed on the Paris Stock Exchange in the way successful social investments must
of an exchange uniquely positioned
third ways – they reject either/or propositions April 2007 to channel investment into its operate and the way traditional profit-making
given widespread to transfer
and change systems. not-for-profit social ventures. In the UK, a financial tools work. The sub-prime crisis
dissatisfaction remittances is that
When social entrepreneur Muhammad social, environmental and ethical index (the involved complicated financial tools and
with the current they are typically
Yunus (see page 44) was awarded the SEE Index) for companies is in its infancy. intermediaries that divorced the finance from
banking and located outside of
Nobel Peace Prize in 2006 it meant explicit Also in the UK, the first steps are being the people in the aspirational houses with
political situation’ the major urban
recognition by the international community, for taken towards consolidating some kind of the loans.
areas and in regions
the first time, that poverty was a threat to peace. social investment marketplace, such as the In contrast, social enterprises can’t work Dan Hird
where they are the
As if this wasn’t radical enough, in his ClearlySo website. All this is in the recent without intimate knowledge of clients and of Triodos Bank is
only provider of
acceptance speech Yunus talked about a social past – the future holds even more promise. partners, and social investment can’t work an advocate of the
such services’
stock exchange. A place where for-profit Most significantly, in March 2008 the without intimate knowledge of the enterprises proposed social
social businesses would gather liquid capital Rockefeller Foundation supported a UK being invested in. No matter how exciting the stock exchange, An age-old practice
investment. Yunus envisaged an exchange where company called Social Stock Exchange Ltd to tools are, for those tools to work they will have but not everyone is is given new life,
investors would receive their original investment carry out research into the possibility of a social to draw upon this knowledge. And, in contrast impressed explains roger
back but not make financial returns on top; their stock exchange based in London. This would to the recent rapid financial movements, they Frank of Benchmark
motivation would be social not financial. be a place where like-minded investors would will need to take a long-term view apace with Asset Managers
That was not just an idea, floated in a receive social returns and their investment the often glacial movements of social change.
speech and forgotten about. Some see the back, but not necessarily any extra financial Yes there is risk in innovation, and
work of existing ethical exchanges – stock returns. The research authors discuss their questions must to be asked for the good of all
markets that only list ethically-vetted work in this chapter. concerned, but the biggest question around
companies in Brazil and in South Africa In fact, this whole chapter is about the risk is this: what is the risk to our world of not danonecommunities.com
– as a first step towards creating a social social investment of the future and, as always, looking at social finance innovation? FIND socialcapitalmarkets.net
stock exchange. Around the world there the future is unknown. A social stock exchange OUT clearlyso.com
are other similar activities. In France, food may never happen, but then again it could be yOUr ANSWEr MIGHT DEpEND ON WHAT MOrE seewhatyouarebuyinginto.com
and drinks giant Danone set up a mutual just around the corner. SOrT OF WOrLD yOU THINK IS pOSSIbLE
110 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 111

a social investment wholesale bank
THE rEpUTATION OF the City of mirrors this at a macro level, Advocates, including the
London has taken a hammering. appropriating the ideas and the government, have suggested
Hedge funds are under the cosh, tools of the financial markets and some key functions for this new
bonus culture reeling and the bringing in money from a range of institution, including pulling in
credibility of investment bankers sources, but directed at social and money from investors, investing
A brighter form of banking
destroyed. Old fashioned retail environmental returns? in social banks and social lenders,
banking is back. So why, when This idea has emerged from building a market place, providing
society as we know it was almost the refrain repeated over the advice and support, and selling the
uprooted by the recklessness last five years or more that the vision of social investment.
of investment banks collapsing social enterprise sector – and But it is not clear which of
An investment bank established with the sole purpose of doing around us, is there an emerging indeed the wider third sector – is these is the most important or
consensus and increasing appeal undercapitalised. The argument where the focus should fall. There
social and environmental good – it’s an idea that could make us fall around the idea of another? runs not that the sector is short is also considerable confusion
in love with banking again. but how would it actually work and what But the idea of a social of money per se but that it lacks around the level of need. Some
investment bank – or ‘wholesaler’ capital. This is a supposedly a vocal sector representatives simply
could it achieve? our reporters explain to distinguish it from social retail sector starved of investment, of call for whatever money they think
banks and lenders like Big Issue finance, of loans and equity. A they can get. Others – with years
Invest or Futurebuilders – would be sector scratching around living of experience in the financial
investment banking re-imagined. from hand to mouth on the basis sector – say ‘build it and they will
Based around the idea that, just of some funding here, and some come!’, predicting that once the
as the social and environmental income there. A contract for the infrastructure is in place, social
side effects of investment banking next few months perhaps, some entrepreneurs will pour forth with
have taken second stage for their fees slowly trickling in and perhaps appeals for investment. And there
City colleagues, social investment even a donation to get through the are those – with years of experience
bankers could operate with making tough times. But a real lack of hard in the third sector – who are
money as secondary to their capital which could bolster, grow incredibly nervous about the scale
primary purpose. and sustain the sector. and capacity of demand on the
It would be an investment frontlines. Is the sector ready to
house with a mission to do good WHat Would It do? absorb such investment? What
for society rather than driven So how would an investment have we learnt from the experience
by a need to deliver financial bank with a social purpose break of Futurebuilders, Charity Bank,
returns for investors. We are this vicious circle? And is there Triodos and others?
familiar with social enterprises a consensus around how such Another uncertainty is whether
pursuing social and environmental an institution would work? What investment is destined for social
impact above all, so how about would it actually do? Who would enterprise only and whether
a financial institution which run it? the traditional voluntary and »
112 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 113

a social investment wholesale bank
community sector might lose out. works that confront us when we
In the social enterprise world, wait at the train station, or the
we are profoundly comfortable Dragons’ Den that awaits us
with models based on business on BBC TV when we get home?
principles. But others will look at Perhaps today we see it on a
the experience of the public sector small scale when we help paint a
as it has taken on models from local community centre, repair the
the private sector – the targets, changing rooms next to the sports
incentives, bonuses, business plans field or give a battered old laptop
and private finance creeping in to a development charity. But if
where trust, duty and old-fashioned these are the only few examples
public service ethos once reigned we can hold up for the man on the
– and will fear the same intrusion street to recognise – and which
in a third sector context. They may pale in the face of the billions
ask whether the social sector really channelled into the City and
wants to be capitalised. Questions public services – then perhaps the
on measuring impact, the size advocates of a new infrastructure
and scope of a new vehicle and who for social investment have a point.
will run it also remain unanswered.
BanKInG on tHe Future
WHat Is soCIal InVestMent So can we imagine social
anYWaY? investment as a more familiar
In the private sector we know what phenomenon? What if a city
investment looks like. The pursuit council – instead of investing
of financial return which seeks to spare cash in potentially risky
add to the sum of private wealth mainstream financial markets
can be easily recognised when – pooled its money alongside
venture capitalists have become a high street bank and a local
a part of our light entertainment community foundation to
firmament and through our banks invest in an ambitious scheme
– whoever owns them in these to generate cleaner energy from
strange times. community recycling across a
In the public sector we city? Perhaps the bank could The bank at from European money, a venture government department and a can trust. Perhaps this could even
recognise investment easily too. earn interest, the community the end of philanthropist and a pension big charitable foundation invest be an investment bank to fall in
The drive to deliver more effective foundation could achieve more the rainbow fund, and channelling it towards together in a model of community- love with?
and efficient public services and impact than it would acting community broadband solutions owned shops that offer basic
to improve public health or state alone, and the council might for retired people in remote banking services, post offices and The government has launched a
education can be seen every time get its money back if the project areas. Or could the bank leverage financial advice? consultation on the design and
a minister reminds us of the massive takes off commercially. They resources from a private equity Is the future of social functions of a Social Investment
investment in new schools, in new could also be better off overall as house, a red-brick university, the investment going to run along Wholesale Bank. This was
hospitals and in public transport a result of the savings on waste catalytic role to bring these players Wellcome Trust and an aid agency these lines and is this bank announced in the Budget 2009 and
infrastructure. contracts, energy bills and the together – or ‘intermediate’ – together to invest in a university the vehicle we need to drive it will inform substantive proposals
But how do we recognise carbon credit trading. and drive exciting new flows of spin-out to deliver affordable forward? For now, these are just a to be developed by the Office of the
investment in the good of Could this not already money that work for investors and pharmaceuticals to the developing few innovative models which the Third Sector. The consultation runs
society, in communities and in happen? Yes, but somehow it investees alike. world? Could the bank help the advocates of the new institution for 12 weeks ending on 7 October.
the environment when it is less doesn’t. So this is where advocates The bank could look at the inhabitants of a small town in the envisage, all catalysed by the See www.cabinetoffice.gov.uk/
conspicuous than the engineering of the new bank see it playing a scope for bringing together finance south west of England, a central creation of an investment bank we third_sector.aspx
114 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 115

a social stock exchange
IN THE MESSy AFTErMATH of the Alternative Investment Market and service development.
global economic meltdown, the (AIM) and Plus Markets. Social enterprises have to go
financial services industry has The answer, say some social out looking for investors, rather
come under scrutiny as never investment experts, is to create a than the other way round. A social
before. One of the key questions social stock exchange – a shares stock exchange would also help
that experts are considering is trading platform regulated by attract the right sort of investor –
whether the focus on maximising the Financial Services Authority those for whom making a profit
profit at the expense of all else is a on which companies with a clear and making a difference are both
The enterprise, the investor sustainable long-term strategy.
A growing number of
investors think not and they are
social and/or environmental
mission can be listed.
‘A lot of social investors find
important. And it would have
the added benefit of creating more
liquidity for ethically-minded
and the exchange keen to put their money into
companies whose core mission is
to alleviate some kind of social or
it difficult to identify smaller cap
companies as they rarely if ever
attract any coverage from equity
investors, allowing them to take
out their money quickly if needed.
A social stock exchange would
environmental problem as well as analyst investors,’ says Pradeep attract pension funds, as it would
A social stock exchange attracts vocal supporters – and equally make a profit – social enterprises. Jethi, one of the founders of Social have RIE (recognised investment
A 2008 report published Stock Exchange Ltd, a company exchange) status. Most large
vocal detractors – but is it an idea whose time has come? by the European Social in the process of setting up a social institutional shareholders that
Flemmich Webb investigates the pros and the cons Investment Forum predicted stock exchange. (Smaller cap invest in pension funds can only
that the proportion of sustainable companies are those with lower put money in companies that have
investments in European high trading volumes.) RIE status. This would unlock
net worth individuals’ portfolios ‘There is currently no single institutional shareholder money
will rise from about eight per cent, place in which social investors can for social enterprises as well
as of 31 December 2007, to 12 identify these kinds of companies,’ as the approximately £56bn,
per cent by 2012, surpassing the Jethi says. ‘A social stock exchange as of October 2008, that charities
€1tn mark. It found that there is a would be that place.’ and foundations in the UK invest
growing demand for ‘sustainability in equity, cash and bonds. This
criteria’ as an investment choice. ConneCtInG enterPrIses would mean investors could put
But while the desire to invest WItH InVestors money into businesses that have
ethically might be growing, A social stock exchange could also some alignment with their own
investors face a difficulty. It’s often help the enterprises themselves. As social missions.
hard to find information about social enterprises are not listed on The social stock exchange
social enterprises as generally they the main exchanges, they find it could also be the primary listing
are not listed on the three main hard to raise capital from public and for community interest companies
stock exchanges in the UK – the private investors – this is investment (CICs) – a type of UK limited
London Stock Exchange, the that they need for ongoing product company structure designed »
116 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 117

a social stock exchange
Exchanging ‘There will be a lot of new be a good idea. Some experts feel it I don’t think anyone yet has the Company feels that the sector performed poorly over the past
money, companies coming to public markets would actually marginalise social answer to, even though it’s needs to become more business- decade and that although social
changing values looking for capital to provide their enterprises. a prerequisite for a social stock minded and carry out more enterprises may turn out to be
public services.’ ‘It could create a kind of exchange is some measure of research on social investing, longer-term investments, they
This suggests that the current backwater,’ says Rod Schwartz, consistent social impact reporting,’ provide centralised resources to are often lower risk and still
economic situation might actually CEO of online marketplace for says Daniel Brewer, director of make it easier to invest in social make profits and distribute them
for social enterprises that want benefit a social stock exchange. social business ClearlySo, who Equity Plus and Resonance, which enterprises and invest more in the to shareholders.
to use their profits and assets ‘I think the timing is right for is skeptical that a social stock both match investors with social development of liquidity issues There are still a lot of ifs and
for the public good. As the CIC the launch of an exchange given exchange would work. enterprises. ‘Investors value each to do with fundraising and the buts, but if a social stock exchange
structure is increasingly adopted widespread dissatisfaction with ‘For the sector to move on, social impact differently. It’s not buying and selling of shares. is created it’s likely that it will
by organisations such as NHS the current banking and political it is really important that there enough to have a standard way ‘What’s really needed is a bit be most effective as one part of a
trusts that have large government situation,’ says Dan Hird, head of is a mainstreaming of social to measure the amount and quality of a focus by the social enterprise new social investment ecosystem
contracts, there will need to be a corporate finance at Triodos Bank. businesses and enterprises. It’s of impact, investors also need community on this form of that would include more fund
capitalisation mechanism. ‘It would attract interest and only when we get the mainstream the ability to price them according investment to see how it can be and capital flows, and a social
‘Over the next five to 10 years, support for the right reasons funds to invest in these types of to their own social priorities.’ developed,’ he says. investment wholesale bank (see
the government is not going to be provided the initial entrants are organisations that we will really And even if a social stock There is a perception, too, page 112). And if the predictions
able to raise the money required credible businesses.’ be making progress.’ exchange were set up, some say that ethically invested money of increases in the number of
to invest in public services in the There could also be problems more work is needed to make produces lower returns. The social investors turn out to
way that it used to given the current PossIBle ProBleMs with defining and measuring the the social enterprise movement social enterprise community be correct, the demand should be
state of the UK fiscal position,’ But not everyone thinks a social social impacts of social enterprises. more robust. Jamie Hartzell, refutes this, pointing out that there for social enterprises and
says Jethi. stock exchange would necessarily ‘One of the big questions that CEO of the Ethical Property conventional markets have a social stock exchange to thrive.
118 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 119

social impact bonds
NATHAN WAS jUST eight years old social impact bond (SIB), a social BeYond tHe Bars
when he and his siblings were taken investment approach that generates To return to Nathan, he received
into care. By the time he was 16, savings for the tax payer through limited support during his
following a succession of failed improved social outcomes rather sentence as he was regularly
foster care placements, Nathan was than service cut-backs. moved between prisons and was
estranged from his family, addicted SIBs raise social investment ineligible for some intervention
to cocaine and dabbling with crack. to pay for a range of services programmes due to his short
The following years saw him targeting specific social outcomes. sentence.
spiral into a life of drug dealing Government commits upfront to When he left prison, Nathan
Building bonds for and petty crime that he used to
fund his drug habit. He was sent
to prison for nine months for
returning an agreed percentage
of realised cost savings to SIB
investors in the event of success.
was given a £47 discharge grant,
but the length of his sentence
meant he received no resettlement
a better society robbery and assault shortly after
his 21st birthday.
Stories like Nathan’s are, sadly,
In this way, SIBs act as a catalyst
to move government spending
away from high-cost programmes
support from the state. No
accommodation had been
arranged for him and his benefits
all too familiar. The immense operating at the crisis end of the took a few weeks to come through.
What if one piece of paper could guarantee that government is pressure on government budgets, situation, delivering value for With no money and nowhere else
that is set to increase further over money to tax payers and better to go, Nathan got back in touch
investing in the best possible solutions to society’s ills? What if it the coming years, means that outcomes for society. with some of his old friends who
could save taxpayers’ money and earn you a tidy financial return? the vast majority of government In addition to these reintroduced him to drug abuse
spending is tied up in costly benefits for taxpayers, SIBs are and crime.
It’s possible, says Toby Eccles of Social finance, the organisation programmes that seek to deal with attractive to a wide range of Unfortunately, Nathan’s story
pioneering the social impact bond social problems once they have other stakeholders. Trusts and is repeated across the country for
happened, for instance through the foundations benefit from a route many of the 40,200 short sentence
provision of prison places. to partnership with government prison leavers each year.
Little money is currently that ensures funding for effective It comes as little surprise,
available for the earlier, cheaper, interventions, enabling them to therefore, that short-sentence
preventative interventions, like channel more funds towards social prisoners under the age of 25
more highly supported foster care change. Meanwhile, third sector have a 92 per cent likelihood of
placements, that could dramatically providers that would typically be reoffending within two years of
improve the life chances of children excluded from outcomes-based release. This generates significant
like Nathan and save the state contracts due to poor access to costs for government through
a substantial amount in crisis working capital, can participate in policing and sentencing costs, and
spending down the line. service delivery as the majority of for society through property loss
Social Finance believes that risk is transferred to SIB investors and insurance premiums. The
this situation can and should be and funding for service delivery is imprisonment of a parent also leads
remedied and has developed the provided up front. to intergenerational offending; »
120 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 121

social impact bonds
two-thirds of boys with a convicted KeePInG KIds In sCHool save money for taxpayers and
parent go on to offend. Each year more than 10,000 increase quality of life for
Breaking this cycle would children are excluded from elderly people. For example,
yield significant social dividends schools in the UK. On average, Evercare is a US company with
and substantial cost savings for a child excluded from school a community care model now
the criminal justice system. Social costs the taxpayer an additional operating in the UK with a
Finance’s first SIB pilot will pay £64,000 over the child’s number of PCTs – it has reduced
for a range of services to reduce lifetime, driven largely by the hospital admissions in the US by
reoffending over five years. increased education costs of a around 50 per cent.
Social Finance believes pupil referral unit. SIBs have the potential to
that SIBs have the potential to School-Home Support is drive positive social change while
transform the way that a broad a charity that provides social generating savings for the tax
range of social outcomes are support in schools in London, payer and a return for investors.
financed. Here are just a few Yorkshire and the Humber Social Finance believes that
examples. that has demonstrated the SIBs could play a fundamental role
ability to reduce exclusions by in transforming the effectiveness,
reduCInG reoFFendInG 25 per cent at a cost of £29,000 efficiency and sustainability
Figures from the Ministry of per prevented exclusion. This of the social sector in the
Justice in 2007 show 40,200 generates a net saving to society UK by facilitating innovation
adults leave prison every year per student of £35,000 and and growth.
after serving a short sentence. substantially improves the life
Over two years 73 per cent of chances of the young people Social Finance would like to thank
these prison leavers will reoffend, involved. the Prime Minister’s Council on
driving long-term costs to the A 25 per cent reduction in Social Action, Frontier Economics,
criminal justice system and the number of excluded children the Indigo Trust and the St Giles
placing a burden on society and nationally would generate an Trust for their support in developing
a prison system that is operating annual saving to the taxpayer the social impact bond to date
at capacity. of £90m. An SIB could be
Yet, solutions exist. A structured to raise funding for
regional project delivered a drop interventions focused on reducing toby eccles is
in the reoffending rate of 17 the number of exclusions. development
per cent for participants over director of Social
a two-year period. On this basis, Care In tHe CoMMunItY Finance and has
Social Finance estimates that In the UK studies with at risk been working
national implementation of an patients in nine primary care on developing a
SIB to resettle prison leavers trusts (PCTs) show that around social investment wholesale bank
could deliver cost savings to the three per cent of over-65s are since joining the Commission
taxpayer of £900m over five years. responsible for 35 per cent of on Unclaimed Assets in October
unplanned hospital admissions, 2005. Prior to working for the
75 per cent of this group lives Commission he was director
in the community in their of research at the charity ARK
own homes. These unplanned where he built programmes
Like atoms, admissions are estimated to cost around education in the UK and
Like links, £6,500 per admission. communities with high levels
Like us: Introducing an SIB to of HIV/AIDS in South Africa. He
Building bonds fund interventions to reduce also worked in corporate finance
we will this admissions rate could at UBS Warburg.
122 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 123

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david robinson tells Claudia Cahalane why the prime minister’s
Council on Social Action is backing social impact bonds
THE SEEDS OF the social impact ‘Aims would be agreed between SIBs would be a competitive
social
bond (SIB) were sown at the G8 government and knowledgeable investment. We are optimistic that
summit in Gleneagles, 2007, social investment intermediaries.’ they would be a good investment
according to David Robinson, The government would make financially, as well as socially. We
vice chair of the Prime Minister’s a promise to pay back investors, at a can’t just depend on the social case,
Council on Social Action. premium, based on how successful that would be limited.’
enterprise
He says the idea is loosely the programme is at achieving The geographics of the pilot
modelled on the International desired outcomes. For example, if are ‘irrelevant’ he says, because
Finance Facility developed at it’s working, the government would if they work in one area, they are
the summit that was designed as be spending less money on prison likely to work in another.
a way of funding immunisation places and social workers, and could All government departments
live.com
and healthcare across the world. pay some of those savings back are watching closely to see how the
They developed a way of to investors. pilot works.
converting long-term government ‘The investment will be private, The challenges, Robinson
funding pledges into immediate from philanthropists and charitable admits are ‘the fact that savings
cash on the capital markets through trusts that have an interest or for the government accrue in so
bonds issued to investors who connection to the issues they are many different places and across
are willing to wait a while to see supporting,’ says Robinson. many different departments. So,
their money come back. So far, ‘Initial investments are likely to translating which budgets have
immunisation bonds alone have come from those who have invested been saved is complex’.
raised US$1.6bn. before, although ultimately we SIBs are very much a Labour
SIBs will also depend on believe that SIBs could take their initiative, but Robinson says the
patient capital. place alongside other straightforward Conservatives have not indicated
‘The basic premise is that commercial investments.’ that they would not continue to
investors and trusts pay into a Robinson says the pilot SIB, run with the idea should they win
bond, which has specific social discussed by Toby Eccles in the the next general election.
outcomes attached to it, such as preceding article, partly seeks to ‘We are hoping it will all be up
reducing re-offending rates or give extra assurance to investors, and running in the next year. And
teenage pregnancies in a specific and is in the planning stages. any new party would be fools to not
area,’ says Robinson. ‘We need a pilot to prove that adopt this,’ concludes Robinson.
124 Chapter four: Exploration and experimentation

the role of remittances
MICrOFINANCE IN ITS simplest loans a microfinance institution will seen a significant cutback in
form is about providing banking make to an entrepreneur, frequently growth. Secondly, many of the
services to the unbanked. those remittances are used to pay for workers who left their home
Typically, there are four life’s basic necessities. countries for better opportunities
primary services that microfinance have returned home as those
institutions provide. The first less ProFIt, More rIsK opportunities have disappeared.
and most important is credit. The growth of remittance For many countries, this
The borrowers are mostly women services provided by microfinance has contributed to a significant
who use the financing to start institutions is an exciting decline in gross domestic
Money makes it round businesses with the ultimate
goal of helping their families.
Savings is frequently the second
development but it also comes
at a time when microfinance
institutions are struggling
product. For example, a recent
article in the The Washington Post
said: ‘While the change could
the world major service. Then there is the
second tier of services: insurance
and transferring remittances, the
thanks to the global financial
crisis. It’s not unusual to see a
microfinance institution that had
be temporary, the remittance
slowdown should serve as a
wake-up call to regional leaders.
money sent by a foreign worker to been growing 50 to 70 per cent That is particularly true for those
It isn’t always obvious but there is a line of blood and cash that their home country. per year have that growth rate countries such as the Dominican
Increasingly, remittances cut in half due to lack of capital. Republic, Haiti, Honduras,
links a Czech worker in manchester with a micro-entrepreneur can have a major impact on a The capital that is available costs Jamaica, Nicaragua and El
in prague. Increasingly, that cash is sent home through social country’s gross domestic product more now, so profit margins have Salvador where remittances have
as well as being an important been impacted and, anecdotally, come to represent 10 per cent or
investment routes which benefits everyone, writes roger Frank source of revenue for microfinance portfolio at risk (that is loans 30 more of gross domestic product.’
institutions. days past due), has risen from Even those countries with
What makes microfinance approximately two per cent to more developed emerging
institutions uniquely positioned three per cent or more. markets have felt the impact.
to transfer remittances is that Finally, if you look at the four According to the same article:
they are typically located outside revenue sources of a microfinance ‘Mexico’s central bank reported
of the major urban areas and in institution – credit, savings, that remittances, the second
regions where they are the only insurance and remittances – it’s biggest source of dollars into
provider of such services. This in this last area where the impact Mexico after oil, fell in January
means no expenses incurred of the global credit crisis has been to $1.65bn, a 5.9 per cent drop
travelling to the nearest large most dramatic. from January 2007 – the largest
town to pick up the cash from Why the slowdown in since Banco de Mexico began
overseas and more money in the remittances? First, many of keeping records in 1995.’
pocket of the receiver. the expat workers who are This is bad enough but in
While sometimes those the source of remittances are some countries the news is even
remittances are used to pay back working in industries that have worse. For example, according »
126 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 127

the role of remittances
to a May 2009 article in The Wall responsible for sending remittances
Street Journal: ‘Armenians who are professionals working in
live abroad send less money developed countries.’
home. Now some expatriates are So while the economic news
returning and looking for jobs, and impact on remittances has
presenting new problems for the been significant, there are some
economy. In Armenia typically the glimmers of hope. First, the world
$2.5bn plus a year in remittances is not looking as dire now as it did a
make up about a fifth of it’s GDP.’ year ago. We’ve seen this reflected
What has further compounded in the dramatic rallies in emerging
the economic problems for many market equities and gradual
of these countries is not just the increases in commodity prices.
decline in remittances. Many of Secondly, while microfinance and
them are commodity-dependent microfinance institutions have seen
countries that have been hit by the a slowdown in their business, as the
double whammy of lower prices industry continues to expand, more
and less demand. Once again, microfinance institutions will be
turning to our Armenian example, offering remittance services, thus
exports have been hit amid increasing the flow and availability
tumbling prices for copper. of capital.
This means more capital for
Better neWs In IndIa more entrepreneurs
Despite the tough environment and more opportunities for
for remittances, there are regions social investment.
where the news is not as dire. India,
for example, which has restrictions
on the flow of capital into the roger Frank
country, has seen less of an impact. is a partner at
According to an article in Benchmark
June in the Indian newspaper Asset Managers
The Economic Times: ‘The global and one of the
economic slowdown has limited pioneers in using
impact on remittances to India, the capital markets for social
which is estimated at three per cent change. He is a winner of a Fast
of India’s GDP.’ Company award for companies
Washington-based Global having a positive social impact
Financial Integrity, lead economist, and has raised over $500m for
Dev Kumar Kar said: ‘India has a microfinance institutions in the
highly resilient economy and the developing world.
global slowdown will have limited
impact on India’s growth prospect.
The economy is forecast to grow at
6.7 per cent in financial year 2009
and around six per cent in financial
year 2010.’
Behind this he noted was the Notes & pennies,
fact: ‘A large part of Indian workers wings & propellers
128 Chapter four: Exploration and experimentation Good Deals 2009: The Social Investment Almanack 129

Perspective
consultation on a social investment wholesale first close of its first social venture capital
bank (see page 112). fund (Renewal has been investing since the
Across the pond, US president Barack 1990s) while in the UK, WHEB Ventures,
Obama has announced an Office of Social the Cleantech-oriented investor, announced
Innovation, designed to be a centre for a £57m first close last year, en route to its
experimentation in the United States in this £150m target.
But some of the more important progress
has been made in the key infrastructure area.
At the aforementioned Skoll World Forum
two bold new initiatives were announced
which have the potential to greatly accelerate
the onset of what we describe as the ‘social
With the political focus economy’, where social business, enterprise,
The mature approach shifting, politicians
are assuming a helpful
commerce and investment play a far more
central role in the global economy. We
launched ClearlySo as the world’s first
to a crisis and perhaps more
appropriate role as
marketplace in this area. Also the New York-
based Rockefeller Foundation announced its
Global Impact Investing Network (GIIN).
The GIIN is backed by a $30m three-year
cheerleader for social commitment and the high profile of the
enterprise Rockefeller Foundation. It will support core
As financial markets rebuild themselves, and more serious role. Politicians across the infrastructure on the investment side and
political spectrum see this form of organisation create a sea-change in the social investment
social enterprises must do the same
as a potential way to deliver services demanded arena. Other infrastructural initiatives from
and prepare themselves for a brave new by the public in a way that does not make area. However, the $50m seed fund which was all over the world either have been or are
any further demands on seriously depleted also announced is remarkably small given the being announced.
world without training wheels, writes
government coffers. At ClearlySo’s annual size of the US and the sums spent to support When we look back five years from now,
rodney Schwartz Social Business Conference last November, the banking system. we will see this period as the one in which the
politicians from the two major UK opposition With the political focus shifting, sector reached maturity and came to stand
parties, the Conservatives and Liberal politicians are assuming a helpful and perhaps on its own two feet – partly out of necessity!
WITHOUT ANy DOUbT, the single most Democrats, were in complete agreement more appropriate role as cheerleader. Some
significant event for the social business sector with the Labour minister for the third sector bemoan the absence of largesse. The view at
– and for the entire economy – last year was regarding the increasingly central role the our organisation, however, is that the more
the collapse of the world’s financial system. sector can play. Conservative leader David frugal approach may be a blessing in disguise. rodney schwartz is the
Following the failure of several large financial Cameron’s address at Voice09, the annual If our sector is ever to mature it must stand co-founder of Catalyst,
institutions, the seizure of capital markets conference of the Social Enterprise Coalition, on its own two feet. And the good news is that a venture capital and
and an estimated $3tn international bailout, showed no clear blue water between the Tories this is happening. advisory firm focused on
the impact of the crisis will undoubtedly be and the other parties. On the funding side, private sector the social business sector.
felt for generations to come. As a result, we But the language of the political operators are making progress. At the recent He is chief executive of
believe the nature of economic relations is establishment in relation to the sector has Skoll World Forum, US social enterprise ClearlySo, a marketplace for social business
likely to change and, of course, the ability of changed. Whereas previously talk was Root Capital announced it was going to the and enterprise, commerce and investment.
our elected leaders to meet the needs of bodies dominated by bold new initiatives (and cash!), capital markets as part of a $63m new funding In the 1980s and 1990s, he was an equity
politic will be severely limited. recent announcements have been far more campaign to be invested into businesses research analyst and senior manager with
It is not surprising, in this light, that social sober – involving largely facilitative support. in developing countries. In Canada, Renewal investment banks PaineWebber, Lehman
enterprise is being considered for a bigger The only major exception is the current Partners has proudly trumpeted the $16m Brothers and Paribas.
130 Good Deals 2009: The Social Investment Almanack Good Deals 2009: The Social Investment Almanack 131

talk to dIreCtorY
The Social Investment Directory
your Sector
Create a your own ProFIle and post Your neWs
or leave comments on our online content:
www.
social Directory profiles
Full page and half page
enterprise
profiles of some of the
major players in the UK
social investment market
live.com Directory listings
A broad-ranging,
alphabetical list of
organisations providing
investment, finance,
advice and support,
including lenders,
foundations, wealth
managers, consultants,
support networks, law
firms and umbrella bodies

dIreCtorY ProFIles dIreCtorY ProFIles
CCla CHarItY BanK
www.ccla.co.uk www.charitybank.org
email clientservices@ccla.co.uk email enquiries@charitybank.org
tel 0800 022 3505 tel 01732 774040
WHO WE ArE WHO WE ArE
CClA is the uK’s largest fund manager for charities Charity bank is unique. It is the only regulated bank in
and is owned entirely by its customers. This unique the uK that is also a registered general charity. And it
ownership allows CClA to focus wholly on delivering is the only bank that uses its depositors’ funds solely
performance, service and value to the not-for-profit to provide financial support and guidance to charitable
sector without having to consider the interests of organisations doing vital work in communities across
outside shareholders. the uK and beyond.
WHAT WE OFFEr In this way, it gives people a safe and transparent way
CClA has managed investments for charities, large of using their savings to support charity while earning
and small, since 1958. a fair return.
our suCCess storY: our suCCess storY: PoInt
CClA has developed a range of funds which provide WHAT WE OFFEr
solaraId BlanK tHeatre CoMPanY
great flexibility and choice to meet the varied and Charity bank has a mission to transform people’s lives
SolarAid, founded in 2006, is a charity Point Blank Theatre Company is
often complex needs of its clients. This includes a fully by harnessing the nation’s wealth and using it as a
with ambitious targets. It works to bring a creative arts organisation based in
segregated investment service for clients who require positive force for change.
sustainable solar power to the world’s Sheffield which works in a wide variety
a more specialised portfolio.
poorest communities, and it plans to of community settings, providing
And it’s uniquely placed to help. As a bank, it has the
reach another 1.5 million people in the drama-based development opportunities
As pioneers of ethical and responsible investment, ability to offer responsible and affordable loan finance
next few years. for both emerging artists and marginalised individuals
CClA is committed to engaging with companies to organisations with a charitable cause, that might
in the region’s most disadvantaged communities.
and other organisations in a constructive way to push not be able to borrow from commercial lenders. And
SolarAid also trains entrepreneurs on the ground to set
forward a positive agenda for change. as a charity it understands the importance of having
up solar power businesses of their own, encouraging The company wished to purchase new premises to allow
access to the resources or skills required for a more
a spread of local enterprise in rural communities. it to expand and become self-sufficient, relying less on
CClA has no other purpose than doing what is best secure future.
grant funding.
for the third sector, and takes pride in understanding
Banking with CCLA is part of the strategy to reach that
its customers and providing products that meet for further information please contact Charity bank
target, according to chief executive Nick Sireau. After securing an ideal location for a reduced price,
their needs. on 01732 774040. you can contact us by email
Charity Bank agreed a £150,000 loan to enable Point
at enquiries@charitybank.org or visit our website:
“When our funders give us money, we need somewhere Blank to move the entire company to the Riverside Bar
for more information visit www.charitybank.org.
safe to put it before we spend it,” he says. “We can’t take and Cafe which will enable it to reach a greater public
www.ccla.co.uk
risks, but we still want easy access and a good return. and audience.
CCLA’s COIF Charities Deposit Fund gives us all
of that. It offers a terrific rate and a strong ethical stance.
As a charity, that’s just what we’re looking for.”
134 Directory Good Deals 2009: The Social Investment Almanack 135

dIreCtorY ProFIles dIreCtorY ProFIles
GK Partners tHe laB – nesta
www.gkpartners.co.uk www.nestalab.org.uk
email info@gkpartners.co.uk email challengefund@nesta.org.uk
tel 020 7785 6340 tel 020 7438 2500
WHO WE ArE SErVICES OFFErED
gK partners are advisers to socially responsible our society is facing urgent and complex challenges.
businesses. The directors, gibril faal and Katharine Economic turbulence, environmental threats and
ford, pioneered social enterprise business support in a rapidly ageing population are triggering profound
london through a project financed by the department changes to the way we live and work.
of Trade and Industry (dTI) in 2002. As part of that
work gibril and Katharine created early models, but our public services – from health to transport and
structures and frameworks for the financing and education – are not geared to cope with the scale of
management of social enterprises. That work has these challenges or the pace of change. radical new
developed into up-to-date tools for social enterprise thinking is needed. Which is why nESTA has created
support, training and consultancy. the lab.
our suCCess storY: ProPer oIls our suCCess storY:
WHAT WE OFFEr CHALLENGE LAb
This company collects used cooking oil BIG Green CHallenGe
At gK partners, we provide insightful, groundbreaking explores new ways of tackling critical social,
and refines it to produce biodiesel for We launched the Big Green Challenge
and practical business advice and support to many economic and environmental issues. our current
vehicles. GK Partners helped them with (BGC) to encourage communities to
kinds of socially responsible businesses. We help programmes focus on Communities and Climate
business modelling, access to investment develop their ideas in ways that could
clients achieve optimum financial, social, environmental Change and our Ageing Society.
and operational planning. be scaled, replicated or emulated. A £1 million prize was
and other ethical results.
offered for community-led ideas that could potentially
METHODS LAb
Through its links with one of its environmental partners achieve the greatest reductions in CO2 emissions.
We offer a range of services from action-oriented is where we test and assess the most effective
(London Remade), GK Partners worked with the
training to business modelling to feasibility evaluations. ways to support radical innovation – finding ways of
award-winning social entrepreneur Stephen Hurton, As well as generating some great ideas the BGC also
We help clients incorporate, business plan and raise working that can help ideas grow and take hold. our
helping him create multiple income streams to make his uncovered some of the barriers, identified promising
finance for their organisations (Access to finance). 2009 priorities focus on developing risk capital for
business financially viable. approaches and how to take these to scale. So as well as
We help clients find, lease, purchase and move into social enterprises, incubating social innovation and
showcasing innovation, BGC is also providing valuable
appropriate premises (Access to property). attacking the recession.
GK Partners helped Proper Oils generate investment learning for other projects that tackle impending social crises.
of about £300,000, including capital grants of over
gK partners often provide clients with subsidised LEArNING LAb
£100,000, loans and equity investment. We continue The 10 finalists have now turned their ideas into
business support by accessing government funding. is about learning lessons through practical trials,
to support Proper Oils on a range of business issues. practical projects, including a community installed
Contact us to see if you qualify for this funding. then finding the best ways to share those lessons –
and owned microhydro network in Wales, a bio-fuels
explaining them in ways that people can easily grasp
“GKP have been of invaluable assistance in the production social enterprise run by a prison education
We work with commercial enterprises to make them and ultimately use.
growth and development of Proper Oils.” charity, and a green loans scheme run by a partnership
more socially and environmentally responsible. We
Stephen Hurton, Managing Director, Proper Oils of community organisations.
work with social enterprises, charities, environmental,
arts, cultural and community organisations to make
www.properoils.co.uk www.biggreenchallenge.org.uk
them more enterprising and financially viable.
136 Directory Good Deals 2009: The Social Investment Almanack 137

dIreCtorY ProFIles dIreCtorY ProFIles
rBs CoMMunItY BanKInG trIodos BanK
www.rbs.co.uk, www.natwest.com www.triodos.co.uk
email community.banking@rbs.com or @natwest.com email businessbanking@triodos.co.uk
tel 020 7427 9139 tel 0800 328 2181
WHO WE ArE LET’S TALK
rbS Community banking provides financial products As the world’s most sustainable bank* we not only share
and services to organisations and individuals not well your values, but understand the issues and challenges
served by the financial services industry. facing enterprises pursuing more than just profit.
Whether flexible banking, loans, overdrafts, asset ALL yOUr bUSINESS NEEDS
transfer or business planning is needed, we are With over 25 years’ experience working with many of
committed to ensuring our customers can access Europe’s most progressive social enterprises, we’re
the banking services they need. uniquely positioned to provide:
WHAT WE OFFEr • current, deposit and reserve accounts offering
We have a strong track record in supporting voluntary healthy rates of interest
organisations, charities, and SmEs looking to develop our suCCess storY: PHoenIX • loan finance and overdraft facilities, tailored to our suCCess storY:
new income streams. And our expertise is reinforced With advice and finance from RBS, social meet your needs tHe etHICal ProPertY CoMPanY
through working with organisations grown from enterprise Leicester Social Economy • internet banking The Ethical Property Company is a
marginalised communities. This means we are in tune Consortium purchased a dilapidated building • capital raising services, including share issues very different type of landlord, buying
and receptive to our customers’ individual needs. in a run-down part of Leicester and turned it • equity investment and developing properties to create
into a hub for local start-up businesses and social enterprises. centres that bring together a variety of social change
At rbS Community banking we want to see you grow, pIONEErING SOCIAL INVESTMENT organisations under one roof – enabling them to share
which is why we have dedicated community development The Phoenix Studios, with 12 serviced offices, a meeting We’re the only social bank to offer both business banking skills and ideas.
managers in every region who thrive on developing room, reception and kitchen facilities, highlights RBS’s services and investment banking. The Triodos Social
close, enduring relationships with their customers. commitment to community development and economic Enterprise fund’s recent investment in Charity business As well as providing the company with a full banking
regeneration. Leicester Social Economy Consortium is a has been hailed as a milestone for social enterprise, as service, we’ve played a major part in funding their
And we won’t leave you hanging. trading arm of the local housing charity SHARP, which the uK’s first social venture capital investment. And with pioneering developments. Our Investment Banking team
has another trading arm called STRIDE, which provides almost £4 million to invest the fund is looking for more has worked on three share issues with them, attracting
pArTNErSHIp pOSSIbILITIES work experience and training. social enterprises to speak to. over £7 million from more than a thousand investors.
We have strong partnerships with organisations
across the uK that specialise in getting enterprises The Phoenix Studios development came after Leicester OpEN AND TrANSpArENT We’ve also provided loan finance for the purchase of
off the ground. So if for any reason we cannot offer Social Economy Consortium had successfully completed unlike most banks, transparency is a priority at property, which has seen the company grow to operate
your business immediate support, we can refer you another, similar development – a move that enabled it to build Triodos. We’re completely open about the organisations in 11 cities across the UK and Belgium.
to a partner who can. up its asset base. Now, with the Phoenix Studios development we support and the only commercial bank in the uK that
going strong, the enterprise will have a firmer financial publishes details of every loan we make. So judge our www.ethicalproperty.co.uk
foundation for other similar ventures in the years ahead. ethical credentials for yourself.
*Triodos bank won the Sustainable bank of the year Award at
the fT Sustainable banking Awards, see www.triodos.co.uk/
www.leicesterstride.co.uk bestbank for more.
138 Directory Good Deals 2009: The Social Investment Almanack 139

dIreCtorY ProFIles dIreCtorY ProFIles
WHO WE ArE businesses by social enterprises
big Issue Invest (bII) is a specialised with a proven track record. bII
unltd provider of finance to social will use a social rating system,
enterprises. bII, founded by The developed together with Investing
www.unltd.org.uk
email info@unltd.org.uk
BIG Issue big Issue grew out of a social
enterprise and is led by social
for good, to measure and report
on social returns and impact.
tel 0845 850 1122
InVest entrepreneurs. It has attracted a
wealth of financial talent who want to WHO WE FINANCE
www.bigissueinvest.com
add their experience and passion to bII finances social enterprises
WHO WE ArE AND WHAT WE OFFEr
email becki@biginvest.com our mission of dismantling poverty. throughout the uK, including,
unltd are the leading provider of support to uK social
non-profit-distributing social
entrepreneurs and offer the largest such network in tel 020 7526 3434
WHAT WE DO enterprises, the trading arms
the world. unltd resources over 1,000 individuals each
Typically, bII’s financing ranges of registered charities and,
year through its core Awards programme and supports
from £50,000 to £500,000 for on an exceptional basis, socially-
tens of thousands more via direct engagement and
social enterprises in the form of driven, for-profit businesses.
partnership awards initiatives.unltd operates a unique
loans, participation loans where Investment areas include
model by investing directly in individuals and offering a
repayments are linked to the job creation, health and
complete package of resources; from funding between
future growth of the business, and social care, financial
£500 and £15,000 to ongoing advice, networking and
equity investment. bII will also inclusion, disability
practical support.
finance the acquisition of private and environment.
UnLtd Ventures provides long term specialist support our suCCess storY: MoW & GroW
to a number of outstanding entrepreneurs. Mow & Grow is a unique, effective
and sustainable gardening service with
UnLtd research leads on inspiring and informing action, WHO WE ArE sets out full details of all current
a seven figure turnover.
policy and social change. bIg is the largest of the lottery programmes and our past awards.
distributors, awarding half most of bIg’s funding goes to the
UnLtd Connect brings together experienced It has three main beneficiary groups which include
the money that the national voluntary and community sector
professionals able to offer pro-bono support and those elderly and vulnerable people, those disadvantaged
lottery raises for good causes. and social enterprises are eligible
who are growing social ventures. in the labour market and the community in general.
our mission is to bring real to apply for many programmes
UnLtd Advantage is the premier investment readiness
programme for social entrepreneurs and those
Its founder, Trevor Lynn, has received UnLtd Level BIG lotterY improvements to communities
and the lives of people most in
(please check the programme
guidance for eligibility criteria).
investing in them.
1, 2 and 3 Awards – with support provided by the
Ventures/Advantage team to help with his replication
Fund need. We are passionate about the
impact we make and determined NEW FrAMEWOrK
young UnLtd is transforming how society views young and expansion strategy. www.biglotteryfund.org.uk
that every lottery pound should be In june 2009, bIg published a
people and how young people view themselves.
email general.enquiries@ put to the best use possible. new Strategic framework for
From this UnLtd has facilitated advice for Mow & Grow’s
UnLtdWorld.com connects you to the people, tools and biglotteryfund.org.uk 2009-2015. This is the starting
corporate governance and the legal structuring of a
information you need to change the world. WHAT WE OFFEr point for the development of new
rapidly expanding business/brand and introductions to tel 0845 4 10 20 30
bIg runs a wide range of funding programmes and our website
a number of interested funders.
unltd deliver the legacy of the millennium Awards programmes across the uK – will provide regular
Trust and programmes with partners such as the some offer grants as small as updates on these as
UnLtd’s support has helped Trevor build from his initial
dCSf, Channel 4, nESTA and Comic relief. unltd £300 while others provide larger they emerge.
local pilot scheme to an award-winning national, multi-
operate across the uK with regional offices in belfast, awards to target specific needs in
brand, franchised operation.
birmingham, bradford, Cardiff, Edinburgh, glasgow local communities. our website
and london.
140 Directory Good Deals 2009: The Social Investment Almanack 141

dIreCtorY ProFIles dIreCtorY ProFIles
WHO WE ArE VENTUrE FUNDS WHO WE ArE advisory support in audit taxation
bridges ventures is an investment Invest up to £10m in for-profit, buzzacott has long been and accounting.
company whose commercial entrepreneurial businesses established as a leading adviser
expertise is used to deliver both located in regeneration areas to businesses and Civil Society OUr ApprOACH
financial returns and social and and in sectors such as healthcare, organisations. We have taken a We work closely with our clients to
BrIdGes environmental benefits. We education and the environment. BuzzaCott leading role in the development ensure they fully comply with the
believe that market forces and and promotion of best practice complex mesh of regulation facing
Ventures entrepreneurship can be brIDGES SOCIAL
www.buzzacott.co.uk
– actively engaging with the all organisations, encouraging
harnessed to do well by doing good. ENTrEprENEUrS FUND email socent@ increasing range of entities reporting in a way which best
www.bridgesventures.com
Invests up to £1m in scalable and buzzacott.co.uk building successful businesses supports and communicates both
email info@ HOW WE WOrK sustainable social enterprises with which deliver social, environmental business success and social and
tel 020 7556 1200
bridgesventures.com We pride ourselves on working a clear social mission and a robust and community benefit. environmental impact.
closely with the companies we back business model.
tel 020 7262 5566
and we are committed to helping WHAT WE OFFEr
entrepreneurs achieve long-term for more information, please our services include advice on
success for their businesses. email info@bridgesventures.com corporate structuring, including
or call 020 7262 5566. group structures and the
We currently manage two venture establishment of appropriate
funds and the bridges Social legal forms – for example CICs
Entrepreneurs fund. – as well as compliance and
WHO WE ArE events and have a wealth of WHO WE ArE WHAT DO WE OFFEr?
business link is the gateway interactive online tools – all of The hub is an international platform The hub is the place for you.
to all business support across which provides you with the right of people and projects working for
England. We understand the subtle solutions for your business needs, a radically better world. you can be here by the hour, the
differences between setting from keeping the cash flowing to day, the month or the year. you sign
up and running a Social Enterprise starting a new business. We’ve created an inspired place up to the tariff that works for you
compared to a commercial for meeting, working, learning and gain access to innovative work
BusIness lInK business. GET IN TOUCH HuB and celebrating. and meeting spaces, a diverse
www.businesslink.gov.uk WHAT WE OFFEr
get in touch with your local
business Advice Team today by
IslInGton We borrow from the best of
programme of support and events
and an amazing community.
As a Social Enterprise you could calling 0845 600 9006 and see the www.the-hub.net a personal office, friendly café,
tel 0845 600 9006
be missing out on specialist advice difference we can make to your events space and the comforts you’re invited.
email islington.hosts@
and support to help you develop business tomorrow. Alternatively, of home.
the-hub.net
and grow. our services offer you visit our website to find out more:
the quality of advice and types www.businesslink.gov.uk tel 020 7841 8900 WHAT DO yOU NEED?
of support that are usually the you have things to do, people to
privilege of larger enterprises. meet, meetings to host and a
business to run. you need flexibility,
We offer frEE impartial business support, tools and opportunity.
advice, run a range of frEE
142 Directory Good Deals 2009: The Social Investment Almanack 143

dIreCtorY ProFIles dIreCtorY ProFIles
WHO WE ArE charities, co-operatives and WHO WE ArE WHAT WE DO
The office of the Third Sector was mutuals), enabling the sector red ochre is a management red ochre provides clear and
created in may 2006, incorporating to campaign for change, deliver consultancy specialising in practical support to aspiring
the responsibilities of the Active public services, promote social providing innovative business and existing organisations and
Communities directorate in enterprise and strengthen support to organisations that enterprises to enable them to
oFFICe oF tHe the home office, and the Social communities. deliver social change. scale up, become investment
tHIrd seCtor, Enterprise unit in the department
of Trade and Industry. We are at our responsibilities include red oCHre our team brings a wide range
ready and achieve sustainability.
CaBInet oFFICe the centre of government in the national policy on social enterprise.
www.redochre.org.uk
of skills and experience WHO WE WOrK WITH
Cabinet office in recognition of the our vision is of a dynamic and developed from successful our clients include social
www.cabinetoffice.gov.uk/
increasingly important role the sustainable social enterprise email uday@redochre.org.uk careers in commerce, enterprises, community and
third_sector.aspx
third sector plays in both society sector contributing to a stronger corporate finance, research faith organisations, statutory
tel 020 7785 6294
email info@ and the economy. economy and a fairer society. and management consultancy. agencies, charities, social
cabinet-office.x.gsi.gov.uk investors, government
WHAT WE DO The quality of our work has not departments and ethical
tel 020 7276 6400
The office of the Third Sector leads gone unnoticed. red ochre businesses.
work across government to support managing director uday Thakkar
the environment for a thriving third was voted Social Enterprise
sector (voluntary and community mentor of the year at the
groups, social enterprises, 2008 Edge upstart Awards.
WHO WE ArE SOCIAL INVESTMENT SOCIAL IMpACT THrOUGH We seek to accelerate the
Established since 1975, We offer a dual return to our EFFECTIVE FINANCE development of the social
oikocredit is one of the world’s investors: financial and social. Social finance brings together investment market in the uK
largest sources of private In addition to earning modest social and financial expertise through innovation and rigour.
funding to the microfinance financial returns, investors are to enable more, more effective
oIKoCredIt sector. We also provide credit
to trade cooperatives, fair trade
secure in the knowledge that
their money is being used
soCIal and more reliable funding for
social impact.
WHO WE WOrK WITH
If you are a social investor, or
www.oikocredit.org organisations and small- to fight poverty, promote fair FInanCe ltd a social sector organisation
to-medium enterprises (SmEs) trade and respect our planet’s HOW WE WOrK seeking £1 million-plus in
email uk@oikocredit.org www.socialfinance.org.uk
in the developing world. natural resources. We support social investors and repayable finance, we may be
tel 01995 602806 email info@ social sector organisations to able to help.
MICrOFINANCE socialfinance.org.uk explore their financing options,
Through our local staff, we lend working with them to create
tel 020 7182 7878
working capital to microfinance solutions that enable them to
institutions (mfIs) all over achieve their aims.
the world. In turn, they dispense
life-changing loans to the our advisory and capital-raising
poor and disadvantaged, with services are supported and
a special emphasis on rural areas informed by our research and
and women. market intelligence.
144 Directory Good Deals 2009: The Social Investment Almanack 145

dIreCtorY ProFIles
dIreCtorY lIstInGs
are you an se100 business?
a-B
If you are doing great business that delivers growth and
social change then you should be part of the rBs se100 Index!
a aFrICa InVest Fund arCadIa
Whether a CIC, charity, social firm, community enterprise, ManaGeMent www.arcadiafund.org.uk
aBI assoCIates www.africainvestfm.com email arcadia@nyland.org.uk
co-op or any other social business, join the rBs se100
www.abi.co.uk email info@africainvestfm.com International
Index and help build a market that makes a difference. tel 020 8438 4550 tel 020 7060 0252 grant-making fund focusing on
London International environmental conservation and
to join or nominate an organisation you feel deserves Support for small businesses develops agriculture in Africa cultural knowledge
recognition, visit: with a particular focus on minority through investment in enterprise
communities arts CounCIl enGland
www.se100.co.uk aBn aMro GrouP
aGa KHan Fund For
eConoMIC deVeloPMent
www.artscouncil.org.uk
tel 0845 300 6200
www.abnamro.com www.akdn.org England
International International distributes government and
bank with its own foundation to Invests to build enterprises in parts national lottery money for the arts
foster sustainable development of world that lack sufficient foreign
direct investment aWards For all
aCCess Funds www.awardsforall.org.uk
www.access-funds.co.uk arBor Ventures ltd email general.enquiries@
email info@access-funds.co.uk www.arborventures.co.uk awardsforall.org.uk
tel 020 7793 3730 International tel 0845 410 2030
UK Invests in organisations that UK
online grants information for strive to improve quality of life lottery small grants scheme
not-for-profit sector in a sustainable way
addlesHaW Goddard B
www.addleshawgoddard.com
tel 020 7606 8855 BaKer & MCKenzIe
UK www.bakernet.com
law firm with commitment to CSr email info@bakernet.com
art tel 020 7919 1000
adVenture CaPItal Fund www.reinvest.co.uk International
www.adventurecapitalfund.org.uk email art@reinvest.co.uk law firm that works pro bono
email info@ tel 0121 359 2444 with microfinance fund opportunity
adventurecapitalfund.org.uk West Midlands International
tel 020 7488 3455 ArT (Aston reinvestment Trust),
England launched in 1997, is a pioneering BaKer BroWn assoCIates
Community enterprise funder CdfI, providing loans from £10,000 www.bakerbrown.co.uk
to £50,000 to small businesses and email enquiries@bakerbrown.co.uk
social enterprises in birmingham tel 01179 250 824
and Solihull. ArT uses a mixture UK
of social investment and public and Training, research and development
In partnership with private sector funds. for the social economy
Good Deals 2009: The Social Investment Almanack 147

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
B B-C
BarCHester Green BedFordsHIre and luton BrItIsH BusIness anGels BusIness FInanCe C
InVestMent CoMMunItY FoundatIon assoCIatIon solutIons
www.barchestergreen.co.uk www.blcf.org.uk www.bbaa.org.uk www.business-finance-solutions.
email info@barchestergreen.co.uk tel 01767 626 459 email info@bbaa.org.uk org.uk
tel 01722 331 241 Bedforshire and Luton BreaKtHrouGH tel 020 7089 2305 email info@
Ethical investment and sustainable grant maker supporting local groups www.can-online.org.uk UK business-finance-solutions.org.uk
financial planning advisors email breakthrough@ Trade association for angel tel 0161 2454 977 CHarItIes aId
Bees Knees can-online.org.uk investors Greater Manchester, Cheshire FoundatIon
BarClaYs www.bees-knees.org tel 020 7922 7751 or 7757 loans and support for businesses www.cafonline.org
www.barclays.com email clive.pawson@ UK BrItIsH Venture CaPItal unable to borrow from conventional email enquiries@cafonline.org
International bees-knees.org.uk breakthrough provides funding assoCIatIon sources tel 01732 520 000
runs community investment tel 01724 275 170 and management support to help www.bvca.co.uk International
programmes, offers financial North Lincolnshire established social enterprises email bvca@bvca.co.uk BusIness In tHe CAf’s aim is simple: to make
services in developing world loan finance for businesses scale up and maximise their tel 020 7025 2950 CoMMunItY charity donations go further. We
and social enterprises social impact. Social enterprises UK www.bitc.org.uk help donors to give and charities
BarInG FoundatIon, tHe eligible must have three years’ represents private equity and email information@bitc.org.uk to manage their money. how?
www.baringfoundation.org.uk BIG Issue InVest trading history, a minimum of venture capital firms tel 020 7566 8650 by offering products and services
email baring.foundation@uk.ing.com www.bigissueinvest.co.uk £500k turnover and a scalable UK that make tax-efficient giving
tel 020 7767 1348 email nella@biginvest.co.uk business model. BusIness enterPrIse Fund membership organisation for easier and helping charities make
UK tel 020 7526 3434 www.befund.org responsible businesses the most of donations through
grants for voluntary organisations UK email info@befund.org our banking and fundraising
finance for social enterprises and BrIdGes Ventures tel 01274 207 217 BusIness Plan InsIGHt support services.
Bates Wells and trading arms of charities www.bridgesventures.com Bradford and North Yorkshire www.businessplaninsight.com
BraItHWaIte email info@bridgesventures.com loans and support for businesses tel 0845 337 2995
www.bwbllp.com BIG lotterY Fund tel 020 7262 5566 unable to borrow from conventional email info@businessplaninsight.com CaMBrIdGe CoMMunItY
email a.rumbold@bwbllp.com www.biglotteryfund.org.uk private investment company sources UK FoundatIon
tel 020 7551 7777 email general.enquiries@ that raises funds to achieve Software for business plans www.cambscf.org.uk
UK biglotteryfund.org.uk social/environmental as well BusIness FInanCe nortH including social enterprise email info@cambscf.org.uk
Social enterprise and charity tel 020 7211 1800 as financial returns West tel 01223 410 535
specialist solicitors The principal lottery distributor www.bbvonline.net BuzzaCott Cambridgeshire
BrIstol enterPrIse email info@bbvonline.net www.buzzacott.co.uk grants to local voluntary/
BaXI PartnersHIP BlaCK CountrY deVeloPMent Fund tel 01204 391 400 email socent@buzzacott.co.uk community groups
www.baxipartnership.co.uk reInVestMent soCIetY www.bedf.co.uk North West England tel 020 7556 1200
email business@ (BCrs) email info@bedf.co.uk loans and support for businesses UK Can
baxipartnership.co.uk www.bcrs.org.uk tel 0117 9444 700 unable to borrow from conventional Chartered accountants with www.can-online.org.uk
tel 01383 749 670 email enquiries@bcrs.org.uk Bristol and the West Country sources a charity specialist team email lb.reception@
UK tel 0845 313 8410 loan finance for small businesses can-online.org.uk
Invests in and advises employee- West Midlands and social enterprises tel 0845 456 2537
owned companies loans for businesses that UK
contribute to social, environmental funding and business support
or economic wellbeing for social enterprises
148 Directory Good Deals 2009: The Social Investment Almanack 149

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
C C-d
CaPItalIse BusIness CHarles stanleY CoMMunItY FoundatIon CoVentrY and
suPPort lIMIted (CBs) www.charles-stanley.co.uk serVInG tYne & Wear WarWICKsHIre
www.capitalise.org email admin@charles-stanley.co.uk and nortHuMBerland reInVestMent trust
email info@capitalise.org tel 020 7739 8200 www.communityfoundation.org.uk www.cwrt.uk.com
tel 0845 601 8326 Ceu ltd UK CoMMunItY MoneY CIC email general@ email enquiries@cwcda.co.uk
Sussex, Surrey and Kent www.ceultd.co.uk Independent stockbrokers with www.communitymoney.co.uk communityfoundation.org.uk tel 02476 551 777
loans/support for social email info@ceultd.co.uk charity investment services email info@communitymoney.co.uk tel 0191 2220 945 Coventry and Warwickshire
enterprises tel 01392 666281 tel 020 7061 6238 Tyne & Wear and Northumberland loans for organisations that
South West CHeVIot asset Currently Greater London focused Support and grant giver improve the local economy
CaPItal Fund, tHe CEu holds the Social Enterprise ManaGeMent Community money CIC is a micro
www.thecapitalfund.co.uk Quality mark, with over 10 years www.cheviot.co.uk finance institution and social ConserVatIon FoundatIon CuMBrIa CoMMunItY asset
email londoninfo@yfmgroup.co.uk experience in the South West tel 020 7845 6150 enterprise. We tackle poverty www.conservationfoundation.co.uk and reInVestMent trust
tel 020 7089 5530 delivering: • Social Enterprise UK around the corner by providing email info@ ltd (Cart)
Greater London Development • Impact and Independent investment firm advice, community grants conservationfoundation.co.uk www.ccart.org.uk
venture capital fund for exciting performance Improvement with charity department and micro loans to individuals, tel 020 7591 3111 email enquiries@ccart.org.uk
small businesses • Project Evaluation • Training community groups and small UK and international tel 01768 867 118
and Facilitation • Independent CItY BrIdGe trust businesses. Creates and manages Cumbria
CaPItalIse nortH east Research • Project Development www.bridgehousegrants.org.uk environmental initiatives loans to businesses turned down
www.capitalisenortheast.co.uk and Management • ‘Fairspace’ email citybridgetrust@ by mainstream lenders
CoMIC relIeF
email john@ meeting room/ training hub cityoflondon.gov.uk
www.comicrelief.com
capitalisenortheast.co.uk tel 020 7332 3710
email info@comicrelief.com d
tel 01642 898 679 Greater London
tel 020 7820 5555
North East CHarItY BanK ltd makes grants to charitable projects
UK and worldwide
financial support for social www.charitybank.org daCoruM CoMMunItY
raising funds, making grants
enterprises email enquiries@charitybank.org CItY ParoCHIal Co-oPeratIVe and trust
tel 01732 774 040 FoundatIon CoMMunItY FInanCe www.dctrust.org.uk
CoMMunItY deVeloPMent
CarBon CaPItal MarKets UK www.cityparochial.org.uk www.co-op email admin@dctrust.org.uk
FInanCe assoCIatIon
www.carboncapitalmarkets.com Affordable loans to the charity email info@cityparochial.org.uk andcommunityfinance.coop tel 01442 231 396
www.cdfa.org.uk
email info@ and social enterprise sectors tel 020 7606 6145 email info@ Dacorum area
email info@cdfa.org.uk
carboncapitalmarkets.com London co-opandcommunityfinance.coop Charity providing grants for people
tel 020 7430 0222
tel 020 7317 6200 CHarItY BusIness funds charitable work tel 0117 916 6750 in need
UK
International www.charitybusiness.com Mainland UK
Trade association for CdfIs
Carbon trading and fund email marketing@ CItYlIFe Finance as if people Mattered deVeloPMent trusts
management charitybusiness.com www.citylifeltd.org Co-operative and Community assoCIatIon
CoMMunItY FoundatIon
tel 01793 554 200 email admin@citylifeltd.org finance help more people take www.dta.org.uk
netWorK
CCla National tel 01223 323 481 control of their economic lives. We email info@dta.org
www.communityfoundations.org.uk
www.ccla.co.uk Consultancy and investment advice UK provide loan finance for all types tel 0845 458 8336
email network@
email clientservices@ccla.co.uk for the third sector Independent charitable of social enterprises including UK
communityfoundations.org.uk
tel 0800 022 3505 organisation raising funds co-operatives, community national body for development
tel 020 7713 9326
UK businesses, development trusts trusts and community
UK
Specialist investment manager and businesses developed from enterprises. Expertise in
Independent funder of community
for charities the charitable sector. developing community assets
organisations
150 Directory Good Deals 2009: The Social Investment Almanack 151

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
d-e e-F
donBaC lIMIted enterPrIse nortHern esMee FaIrBaIrn etHICal InVestMents F
www.donbac.co.uk Ireland FoundatIon www.ethicalinvestments.co.uk
email info@donbac.co.uk www.enterpriseni.com www.esmeefairbairn.org.uk email dav@ FaIr FInanCe
tel 01302 341 070 tel 028 7776 3555 email info@esmeefairbairn.org.uk ethicalinvestments.co.uk www.fairfinance.org.uk
Doncaster and the wider South eastsIde Northern Ireland tel 020 7812 3700 tel 0114 2368 168 email info@fairfinance.org.uk
Yorkshire region www.eastsideconsulting.co.uk network of local enterprise agencies, UK UK tel 020 7780 1777
Enterprise agency and loan fund email rachel@ including Aspire microfinance fund Independent grant-making promotes new investment UK
eastsideconsulting.co.uk foundation opportunities loan products and advice to
dsl tel 020 7770 6144 ePWortH InVestMent businesses and individuals
www.dsl-businessfinance.co.uk UK ManaGeMent esseX CoMMunItY etHICal InVestors GrouP
email info@ Eastside’s mission is to www.epworthinvestment.co.uk FoundatIon www.ethicalinvestors.co.uk FaIrtrade FoundatIon
dsl-businessfinance.co.uk create social impact through tel 020 7496 3636 www.essexcommunityfoundation. email info@ethicalinvestors.co.uk www.fairtrade.org.uk
tel 0141 4252 930 enterprise and innovation. UK org.uk tel 01242 539 848 tel 020 7405 5942
West of Scotland We deliver business solutions Specialist fund manager in church tel 01245 355947 UK International
loans for small businesses that ensure financial viability and charity investment Essex Ethical financial advice licenses use of the fairtrade mark
and social enterprises for third sector organisations. grant maker and advises fairtrade businesses
We do this because expertise, etHICal MoneY
dW MarKets investment and innovation etHICal FInanCIal www.ethicalmoney.org FIdelItY uK FoundatIon
www.dwmarkets.com combine to strengthen these PlannInG email info@ethicalmoney.org www.fidelityukfoundation.org
uS-based fund manager and organisations and help them www.ethicalfp.ifa-web.co.uk tel 01748 822 402 tel 01732 777 364
investment bank using move beyond dependency on email ethical.financial.planning@ UK International
capital markets for sustainable grants and donations. equItY Plus ltd ntlworld.com Independent financial advisers Takes an investment approach to
development www.equityplus.org.uk tel 020 8445 1423 grant making
email info@equityplus.org.uk UK etHICal PartnersHIP
eeda tel 0845 527 9204/9227 Independent financial adviser www.the-ethical-partnership.co.uk FIrst enterPrIse
e www.eeda.org.uk UK tel 0845 612 3410 BusIness aGenCY
tel 01223 713 900 Equity plus runs the Social etHICal Futures email enquiries@ www.first-enterprise.co.uk
east lanCs MoneYlIne East of England Enterprise Angel network launched www.ethicalfutures.co.uk the-ethical-partnership.co.uk email rtyas@first-enterprise.co.uk
www.elmline.co.uk regional economic development in 2007 after initial sponsorship email invest@ethicalfutures.co.uk UK tel 0115 9423 772
email elmoneyline@btconnect.com agency from the Cabinet office. It works tel 0845 612 5505 Independent financial advisers East Midlands
tel 01254 295 970 with high social impact businesses The UK and beyond business support service
East Lancashire area enterPrIse4all (nortH to get investment ready and then Ethical independent financial etHos/Mls GrouP PlC
Industrial and provident society West) pitch to investors where there is a advisers www.ethosmls.co.uk FIVe laMPs
providing loans, savings and advice www.enterprise4all.co.uk strong values match. email info@ethosmls.co.uk orGanIsatIon, tHe
email info@enterprise4all.co.uk tel 020 7993 9940 www.fivelamps.org.uk
east london sMall tel 0845 607 0786 International email johnclark@fivelamps.org.uk
BusIness Centre North West England Entrepreneurial charitable tel 01642 608 316
www.goeast.org business support and networking foundation of mlS group plc Thornaby
email keithr@goeast.org Community led social and economic
tel 020 7377 8821 regeneration
East London
Support small businesses
152 Directory Good Deals 2009: The Social Investment Almanack 153

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
F-G G-I
FoundatIon east FroG CaPItal G GlIMMer oF HoPe GrantMaKers WItHout HertFordsHIre
www.foundationeast.org www.frogcapital.com www.aglimmerofhope.org Borders CoMMunItY FoundatIon
email info@foundationeast.org email info@frogcapital.com GaeIa PartnersHIP, tHe email inquiries@aglimmerofhope.org www.internationaldonors.org www.eastspace.net
tel 01284 757 777 tel 020 7833 0555 www.gaeia.co.uk Based in Teas, US email john@gwob.net email office@hertscf.org.uk
Suffolk, Cambridgeshire, International email office@gaeia.co.uk Social enterprise working in high tel +1 617 794 2253 tel 01707 251 351
Bedfordshire, Hertfordshire, Norfolk Investment company with tel 0161 4344 681 poverty areas involving social International Hertfordshire and beyond
and Essex specialisation in cleantech business UK investors to create ‘social profit’ A network focused on ‘global social grant maker
offers business and personal Independent ethical investment change philanthropy’
loans and works with community FundInGInForMatIon.orG advice GloBal PHIlantHroPIC Holden & Partners
land trusts www.fundinginformation.org www.globalphilanthropic.com www.holden-partners.co.uk
email info@inspiring-vision.com GarFIeld Weston email clientsupport@ H tel 020 7812 1460
FoundatIon trust tel 0845 890 4930 www.garfieldweston.org globalphilanthropic.com UK
netWorK UK tel 020 7399 6565 tel 020 7321 3854 HBos FoundatIon Investment management
www.foundationtrustnetwork.org online funding information services UK International www.hbosfoundation.org specialising in ethical investment
email nana.asare@nhsconfed.org grant-giving charity Strategic advisory services for tel 0131 2437 128 and climate change
tel 020 7074 3245 FundInG netWorK, tHe non-profits UK
England www.thefundingnetwork.org.uk GeneratIon InVestMent/ grant maker HuB, tHe
represents nhS foundation trusts email info@ GeneratIon FoundatIon GlouCestersHIre www.the-hub.net
thefundingnetwork.org.uk www.generationim.com deVeloPMent loan Fund HBV enterPrIse email connect@the-hub.net
FrederICKs FoundatIon tel 0845 313 8449 tel 020 7534 4700 lIMIted (GdlF) www.hbv.org.uk tel 020 7841 8900
www.fredericksfoundation.org UK International www.gdlf.co.uk email mail@hbv.org.uk UK and international
email mailto@ funds social change projects Independent partnership dedicated email info@gdlf.co.uk tel 020 7254 9595 global community supporting
fredericksfoundation.net to sustainability issues tel 01242 242 555 Pan London enterprise finance – enterprising initiatives
tel 01242 242 555 FutureBuIlders enGland Gloucestershire priority focus in/around Hackney
South East www.futurebuilders-england. GK Partners lends to businesses and social Commercially run charity offering
helps disadvantaged people start org.uk www.gkpartners.co.uk enterprises enterprise advice I
sustainable businesses email info@ email info@gkpartners.co.uk
futurebuilders-england.org.uk tel 020 7785 6340 Goole deVeloPMent trust HeMPsons IMPetus
tel 0191 261 5200 National www.gooledevelopmenttrust.org.uk www.hempsons.co.uk www.impetus-marches.co.uk
FrIends ProVIdent UK business advisers and project email info@ email london@hempsons.co.uk email info@impetus-marches.co.uk
FoundatIon loans, grants and support consultants to third sector gooledevelomenttrust.org.uk tel 020 7839 0278 tel 01386 556 000
www.friendsprovidentfoundation.org to third sector tel 01405 766 076 National Herefordshire, Worcestershire
email foundation.enquiries@ Gle onelondon Goole provides legal services. Specialises and Shropshire
friendsprovident.co.uk Future FoundatIon www.gle.co.uk/onelondon Supports economic, social, in social enterprise and health CdfI offering loan finance for
tel 0845 268 3388 www.futurefoundation.net email businessloans@gle.co.uk environmental regeneration businesses and social enterprises
UK email office@futurefoundation.net tel 020 7940 1571 HenrY sMItH CHarItY
grant-making charity tel 020 3042 4747 London GraMeen FoundatIon www.henrysmithcharity.org.uk IMPetus trust
UK Economic development; loans up to www.grameenfoundation.org tel 020 7264 4970 www.impetus.org.uk
Identify, explain and measure trends £250,000 provided email sbrown@ UK email info@impetus.org.uk
grameenfoundation.org grant-making charity tel 020 7745 7203
tel +1 202 628 3560 ext 114 UK
International venture philanthropy for ambitious
microfinance charities and social enterprises
154 Directory Good Deals 2009: The Social Investment Almanack 155

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
I-l l-M
InnoVatIVe FInanCe KeY Fund YorKsHIre lanKellY CHase london BrIdGe CaPItal london Funders
www.hastingstrust.co.uk www.keyfundyorks.org.uk FoundatIon www.lbc.uk.net www.londonfunders.org.uk
email if@hastingstrust.co.uk email info@keyfundyorks.org.uk www.lankellychase.org.uk email info@lbc.uk.net email info@londonfunders.org.uk
tel 01424 446 373 / 452 528 tel 0845 140 1400 email enquiries@ tel 020 7877 5050 tel 020 7255 4488
Hastings and St Leonards InVestInG For Good Yorkshire and the Humber region lankellychase.org.uk International London
CdfI run by the hastings Trust CIC (ltd) Investment support for social tel 01235 820 044 Clean technology investment banking membership organisation of funders
www.investingforgood.co.uk enterprises UK and investors
InsPIrInG sCotland email gburnand@ grant maker london BusIness loans
www.inspiringscotland.org.uk investingforgood.co.uk KleInWort Benson www.londonbusinessloans.co.uk
email enquiries@ tel 020 7060 1175 www.kleinwortbenson.com leICestersHIre email wholesale@gle.co.uk M
inspiringscotland.org.uk UK/International email Simon.gordon@kbci.com MoneYlIne tel 020 7940 1571
tel 0870 428 1982 Investing for good is an fSA tel 0161 200 1633 www.leicestermoneyline.co.uk London MaKe Your MarK
Scotland regulated specialist investment UK and Channel Islands email info@leicestermoneyline.co.uk Alternative business finance. www.makeyourmark.org.uk
venture philanthropy offering adviser to private banks, asset private bank and wealth manager tel 0116 2537 879 loans up to £250,000 provided email info@makeyourmark.org.uk
long-term investment and support managers, financial planners, with specialist charity team Leicestershire tel 020 7430 8010
family offices and trusts. our Affordable loans for those declined london deVeloPMent UK
InstItute For unique investment advisory by mainstream lenders aGenCY youth network including support for
PHIlantHroPY services result in portfolios l www.lda.gov.uk young social entrepreneurs
www.instituteforphilanthropy.org whose primary purpose is to lIVInG eartH FoundatIon email info@lda.gov.uk
email contact@ deliver positive environmental laIPeters & Co www.livingearth.org.uk tel 020 7593 8000 MCF (MIdlands CoMMunItY
instituteforphilanthropy.org and social impact. www.laipeters.org email info@livingearth.org.uk London FInanCe)
tel 020 7240 0262 email meiSim@laipeters.org tel 020 7440 9750 regional development agency www.derbyloans.co.uk
International tel 020 7194 8385 UK and international for london email info@derbyloans.co.uk
Works with a global network of J UK Work to resolve environmental tel 01332 365 550
wealthy individuals, trusts, private Accounting services and support concerns Derby
companies, foundations and schools J4B with specialist charity department personal and business loans for
to ensure effective philanthropy www.j4b.co.uk lloYds tsB FoundatIon those turned down by mainstream
email j.phillips@j4b.com lanCasHIre CoMMunItY For enGland and Wales lenders
london reBuIldInG
InVestInG etHICallY tel 01625 628007 FInanCe www.lloydstsbfoundations.org.uk
soCIetY
www.investing-ethically.co.uk UK and Ireland www.lancashire email enquiries@ MerseYsIde sPeCIal
www.londonrebuilding.com
email contactus@ Comprehensive grant information/ communityfinance.co.uk lloydstsbfoundations.org.uk InVestMent Fund
email info@londonrebuilding.com
investing-ethically.co.uk database email info@ tel 0870 411 1223 www.afm.uk.com
tel 020 7682 1666
tel 01603 309020 lancashirecommunityfinance.co.uk UK email info@afm.uk.com
London
UK tel 01772 556 877 funds for charities tel 01512 364 040
K london rebuilding Society
Ethical investment for socially Lancashire Merseyside
provides loans and business
responsible people Community business offering loans loCal InVestMent Fund The fund manager for merseyside
support to social enterprises in the
KelloCK WealtH for residents and businesses www.lif.org.uk Special Investment fund, the
greater london area. We lend to
IslaMIC BanK oF BrItaIn ManaGeMent (KWM) email information@lif.org.uk largest regional fund in the uK
Companies limited by guarantee,
www.islamic-bank.com www.kwm.cc tel 020 7680 1028
Community Interest Companies,
tel 0845 6060 786 email ivor@kwm.cc UK
etc, and also to private limited
UK tel 01727 870 613 loans to social enterprises
companies that have social,
Sharia’a compliant banking UK
ethical or environmental aims.
services Independent financial advice
156 Directory Good Deals 2009: The Social Investment Almanack 157

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
M-n o-P
o Polden-PuCKHaM
MIKe Gordon ConsultanCY neseP nortH london enterPrIse Paul HaMlYn FoundatIon
CHarItaBle FoundatIon
email mike@mgc13.plus.com www.nesep.co.uk CredIt unIon www.phf.org.uk
www.polden-puckham.org.uk
tel 01268 418 172 tel 01914 272 150 email nlec@enterprise.uk.com oIKo CredIt email information@phf.org.uk
email ppcf@
UK (but especially East of England, North East tel 020 8366 8244 www.oikocredit.org tel 020 7227 3500
polden-puckham.org.uk
London and South East) and Europe voice, eyes and ears of social London email uk@oikocredit.org UK
UK
Social enterprise and economy, enterprise in the region Their Ethical fund assists muslim tel 01995 602 806 Independent grant-making
grant giving trust with Quaker roots
social valuation, regeneration, entrepreneurs UK and international foundation
economic and community nesta private financier of the
PrICeWaterHouseCooPers
development www.nesta.org.uk nortH staFFordsHIre rIsK microfinance sector Planet FInanCe
www.pwc.com
tel 020 7438 2500 CaPItal Fund PlC www.planetfinancegroup.org
tel 020 7583 5000
MoneYlIne Greater UK www.nsrcf.co.uk email communication@
International
ManCHester national Endowment for Science, email info@nsrcf.co.uk planetfinance.org
financial services. has a
www.moneylinegm.co.uk Technology and the Arts. Innovation tel 01782 266408 International
commitment to work more closely
email loans@moneylinegm.co.uk and social investment body North Staffordshire microfinance developer
with social enterprises around
tel 0161 736 6500 Invests in businesses with
orCHard 360 the uK
Greater Manchester netWorK 2012 sustainable growth profile PlYMoutH sMall
www.orchard360.com
loans for individuals, businesses, www.network2012.net BusIness Fund
email james@orchard360.com PrIMe InItIatIVe
community organisations email support@network2012.net nortHern roCK www.epl.org.uk
tel 07970 085131 www.primeinitiative.org.uk
tel 07810 446 684 FoundatIon email enquiries@epl.org.uk
South West England/National/ email nigel@
MoneYlIne YorKsHIre (IPs) UK www.nr-foundation.org.uk tel 01752 211 211
International nfoyster.freeserve.co.uk
ltd online business and social network email generaloffice@nr-foundation. Plymouth and the surrounding area
Consultancy offering support, tel 020 8765 7851
www.fisy1.co.uk org.uk provides loans for small businesses
advice, mentoring, strategy, UK
email admin@fisy1.co.uk neW eConoMICs tel 01912 848 412
business planning, investment- business support for people
tel 0114 2760 787 FoundatIon North East England and Cumbria
readiness advice and access to aged 50+
Yorkshire www.neweconomics.org grants, loans, training, research;
funding for all ambitious social
provide personal loans email info@neweconomics.org developing initiatives specifically for
enterprises. over 20 years’ PrInCe’s trust
tel 020 7820 6300 those who are financially excluded
experience across a wide range www.princes-trust.org.uk
UK and international
n of situations: start-up, growth, PlunKett FoundatIon email webinfops@
Independent think-and-do tank with nWes (norFolK and
restructuring and turnarounds, www.plunkett.co.uk princes-trust.org.uk
specialism in social impact and WaVeneY enterPrIse
strategic change. Energetic, email info@plunkett.co.uk tel 020 7543 1234
natIonWIde FoundatIon social return on investment serVICes)
practical, proactive. tel 01993 810730 UK
www.nationwidefoundation.org.uk www.nwes.org.uk
UK loans, grants, advice to young
email enquiries@ neW PHIlantHroPY email advance@nwes.org.uk
The plunkett foundation entrepreneurs
nationwidefoundation.org.uk CaPItal (nPC) tel 08456 099 991
P promotes and supports
tel 01793 655 113 www.philanthropycapital.org East of England
co-operatives and social ProJeCt nortH east
UK including Northern Ireland email info@philanthropycapital.org finance, advice, training
enterprise in rural communities. www.pne.org
grant maker aiming to make a tel 020 7785 6300 and premises PartnersHIPs uK
We provide support, networks email ian.fulthorpe@pne.org
difference to people’s lives UK www.partnershipsuk.org.uk
and knowledge which offers tel 01912 453 678
Consultancy and charity think tank email info@partnershipsuk.org.uk
practical solutions for rural North East
focusing on making impact tel 020 7273 8383
communities that help to create designs, develops and delivers
UK
thriving places where people live innovative projects
public private partnership
and work now and in the future.
investment body
158 Directory Good Deals 2009: The Social Investment Almanack 159

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
P-r s
ProJeCts PartnersHIP, tHe rBs/natWest s seeM sKoll FoundatIon
www.tpplaw.co.uk www.rbs.co.uk www.seem.uk.net www.skollfoundation.org
email info@tpplaw.co.uk email community.banking@ saInsBurY FaMIlY email info@seem.uk.net email info@skollfoundation.org
tel 020 7620 0888 rbs.co.uk CHarItaBle trusts tel 0115 8714 760 tel +1 650 331 1031
resonanCe ltd
UK tel 01412 240 415 www.sfct.org.uk East Midlands International
www.resonance.ltd.uk
legal and commercial advice UK tel 020 7410 0330 regional umbrella body for social drives large-scale change by
email info@resonance.ltd.uk
specialising in public services financial services for enterprises UK enterprises investing in, connecting and
tel 0845 0043432
bypassed by mainstream services operates 18 grant making trusts celebrating social entrepreneurs
UK
ProsPeCts FoundatIon sensCot
resonance is a social investment
www.prospectsfoundation.org.uk red oCHre sCotCasH CIC www.senscot.net sMItH & WIllIaMson
intermediary specialising in
email victoria.ingham@ www.redochre.org.uk www.scotcash.net email mail@senscot.net www.smith.williamson.co.uk
supporting social enterprises
prospectsfoundation.org.uk email uday@redochre.org.uk email info@scotcash.glasgow.gov.uk tel 01312 204 104 tel 020 7131 4000
access values-led risk
tel 01254 380 675 tel 020 7785 6294 tel 0141 2760 525 Scotland UK
capital. It provides investment
Hyndburn UK Glasgow network for social entrepreneurs in Independent providers of investment
readiness consultancy, access
funding, training and practical Consultancy, organisational Community interest company Scotland management, accountancy, tax,
to social investors and project
assistance for community support and training for social offering personal loans and advice corporate and financial advisory
management post investment.
enterprise enterprises sHell FoundatIon services, including to non-profits
resonance is launching a
sCottIsH soCIal www.shellfoundation.org
£20m real estate venture capital
rIse enterPrIse CoalItIon tel 0207 934 2727 soCIal eConoMY netWorK
r fund in 2009.
www.rise-sw.co.uk www.ssec.org.uk International www.socialeconomynetwork.org
email info@rise-sw.co.uk email admin@ssec.org.uk provides grants, loans, guarantees email info@socialeconomynetwork.org
radICal routes tel 01392 435 775 roCKeFeller tel 0131 2432 650 tel 028 9077 0502
www.radicalroutes.org.uk South West PHIlantHroPY adVIsors Scotland sHoreBanK InternatIonal Northern Ireland
email enquiries@ voice of South West social www.rockpa.org Umbrella body for social www.sasbk.com promoting the social economy
radicalroutes.org.uk enterprise email info@rockpa.org enterprises in Scotland email contact@sbksbi.com
tel 0845 330 4510 tel +1 212 812 4330 tel 020 7348 6124 soCIal enterPrIse
UK roBert oWen CoMMunItY International se2 PartnersHIP International CoalItIon
radical co-operative network, BanKInG Fund ltd philanthropy services www.se2partnership.co.uk Invests in people and communities www.socialenterprise.org.uk
makes loans www.rocbf.co.uk email info@se2partnership.co.uk to create economy equity email info@socialenterprise.org.uk
email mick.brown@rocbf.co.uk roCKet sCIenCe uK ltd South East and a healthy environment tel 020 7793 2323
ratHBone GreenBanK tel 01686 623 741 www.rocketsciencelab.co.uk South east social enterprise UK
InVestMents Wales email info@rocketsciencelab.co.uk regional network sIrIus national umbrella body for social
www.rathbonegreenbank.com provides finance for people in tel 0131 226 4949 www.sirius-hull.co.uk enterprises
email greenbank@rathbones.com rural areas UK seee email info@sirius-hull.co.uk
tel 01179 303 000 Consultancy working to help www.seee.co.uk tel 01482 890 146 soCIal enterPrIse West
UK roCKeFeller FoundatIon disadvantaged individuals email admin@seee.co.uk Hull and the surrounding areas MIdlands
Ethical investment management www.rockfound.org tel 0845 606 6296 business loans for local people www.socialenterprisewm.org.uk
services email webmaster@rockfound.org rootstoCK East email info@
tel +1 212 869 8500 www.rootstock.org.uk East of England social enterprise socialenterprisewm.org.uk
International email info@rootstock.org.uk network tel 024 7663 3911
Innovative philanthropy tel 0870 458 1132 West Midlands
attacking underlying causes UK regional umbrella body for social
of human suffering CdfI and social investment society enterprises
160 Directory Good Deals 2009: The Social Investment Almanack 161

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
s s-u
soCIal FIrMs uK soutH YorKsHIre stoneHaGe PHIlantHroPY truestone asset
www.socialfirms.co.uk InVestMent Fund (sYIF) serVICes ManaGeMent
email info@socialfirms.co.uk www.syif.com www.stonehage.com www.truestone.co.uk
tel 01737 764 021 email info@syif.com email info@stonehage.com email enquiries@truestone.co.uk
soCIal InVestMent UK tel 01709 386 377 tel 020 7087 0000 tselF tel 020 7488 7110
sCotland umbrella body for social firms, who South Yorkshire International www.tself.org.uk UK
www. work with enterprises to create Seedcorn finance, business loans, philanthropy related services email info@tself.org.uk Asset management consultancy,
socialinvestmentscotland.com jobs for disadvantaged people equity-linked investments tel 020 7680 1028 including philanthropy and socially
email info@ street (uK) London motivated investing
socialinvestmentscotland.com soCIal MarKet sPIrIt oF enterPrIse loan www.street-uk.com TSElf provides loans to
tel 0131 558 7706 FoundatIon Fund email info@street-uk.com charities and social enterprises tudor trust
Scotland www.smf.co.uk www.northernpinetreetrust.co.uk tel 0121 2301 060 unable to secure sufficient www.tudortrust.org.uk
Social Investment Scotland email info@smf.co.uk email newdeal@ UK funding from mainstream tel 020 7727 8522
provides competitive loans and tel 020 7222 7060 pinetree-centre.co.uk provides microfinance, personal sources. help available includes UK
business support to ‘more- UK tel 0191 4928 200 and business loans loans to purchase property Independent grant-making trust
than-profit’ organisations, Think tank that ‘marries markets North East or improve existing buildings,
based and operating in Scotland, and social justice’ loans, finance and advice for street nortH east loans for vehicles or equipment
that have the potential to take out entrepreneurs with a long-term www.streetnortheast.co.uk and loans to help with day-to- u
a loan but do not fit the lending soutH Coast MoneYlIne illness or disability email info@streetnortheast.co.uk day running costs.
criteria of the commercial banks. www.scmoneyline.org.uk tel 0191 2302 080
email mail@scmoneyline.org.uk sroI uK North East
tel 023 9282 6180 www.sroi-uk.org micro business development finance traIn 2000
soCIal FInanCe Portsmouth area email info@sroi-uk.org www.train2000.org.uk
www.socialfinance.org.uk provides fair finance for local tel 0151 734 5869 suFFolK FoundatIon, tHe email info@train2000.org.uk unItY trust BanK
email info@socialfinance.org.uk people UK www.suffolkfoundation.org.uk tel 0151 236 6601 www.unity.co.uk
tel 020 7182 7878 network dedicated to consistent email info@ Merseyside, Manchester and email cdm@unity.co.uk
UK soutH West InVestMent and effective use of social suffolkfoundation.org.uk Cheshire tel 020 7680 1028
Cutting edge financial product GrouP (sWIG) return on investment, informing tel 01473 734 120 business training and advice UK
development, market intelligence, www.southwest policy, creating tools and providing Suffolk for women providing socially responsible,
social investment research and investmentgroup.co.uk guidance grant giving organisation competitive banking to the charity
capital raising email info@ trIodos BanK and voluntary sector for 25 years.
southwestinvestmentgroup.co.uk steVenaGe CoMMunItY www.triodos.co.uk Rated ‘best for customer service’
soCIal InVestMent tel 01872 223 883 trust t email mail@triodos.co.uk 2005-2009 – Charity finance
ConsultanCY, tHe South West www.sct.uk.net tel 0117 9739 339 magazine, and CSr award winner
www.tsiconsultancy.com CdfI providing finance for local email info@sct.uk.net tool FaCtorY, tHe UK and international – Credit Today.
email tsic-uk@tsiconsultancy.com businesses tel 01438 773 368 www.thetoolfactory.com Claims to be the ‘world’s most
tel 020 7070 2484 Stevenage and the surrounding email info@thetoolfactory.com sustainable bank’. offers
International villages tel 0845 273 3834 comprehensive services for social
Consultancy aiming to build raise funds for charitable causes UK businsses, charities and individuals
partnerships between profit and Creating tools to support the
non-profit sectors third sector
162 Directory Good Deals 2009: The Social Investment Almanack 163

dIreCtorY ProFIles
lIstInGs dIreCtorY ProFIles
dIreCtorY lIstInGs
u-W W-z
uK steel enterPrIse ltd ulster CoMMunItY We InsPIre otHers Y
www.uksteelenterprise.co.uk InVestMent trust www. weinspireothers.com
email ho@uksteelenterprise.co.uk www.ucitltd.com email info@madweekends.co.uk YounG FoundatIon
tel 0114 2731 612 email info@ucitltd.com tel 07906 321 605 www.youngfoundation.org.uk
UK tel 028 9031 5003 VenturesoMe UK Weetu email reception@
provides finance and premises Northern Ireland and the border www.venturesome.org Socially responsible investment www.weetu.org youngfoundation.org
for SmEs, focusing on economic counties of the Republic of Ireland email venturesome@cafonline.org email admin@weetu.org tel 020 8980 6263
regeneration of steel communities Affordable loans and free support tel 020 7832 3026 WesseX reInVestMent tel 01603 230625 UK
to community organisations and UK trust GrouP Based in Norwich. Services cover Social innovation, including fund
uKsIF social enterprises venturesome is a £10m social www.wessexrt.co.uk the county of Norfolk for young entrepreneurs
www.uksif.org investment fund, begun in 2002 email enquiries@wessexrt.co.uk The Women’s Employment,
email info@uksif.org unltd and part of CAf. tel 01404 549 139 Enterprise & Training unit
tel 020 7749 9950 www.unltd.org.uk We have invested £12.5m in South West (WEETu) was established in z
UK www.unltdworld.com over 200 charities and social loans and investment for social norwich in 1987 as a not for
The sustainable investment and email info@unltd.org.uk enterprises. We provide capital change and social returnz profit organisation to improve zoPa
finance association. runs national tel 020 7566 1100 in the form of underwriting, women’s social and economic www.uk.zopa.com
Ethical Investment Week UK unsecured loans and equity-like West YorKsHIre lives, providing training and email contactus@zopa.com
funding and support for social facilities, helping organisations enterPrIse aGenCY business start-up loans to local UK and international
entrepreneurs. behind social to cover cash flow, manage the lIMIted women who may not have access marketplace where people lend
networking site unltd World timing of income and expenditure www.wyea.co.uk to mainstream credit. and borrow money to and from
and invest in growth or email keith.gomersall@wyea.co.uk each other, sidestepping the banks
development. tel 0113 3857 603
V West Yorkshire
unltd adVantaGe
loans for entrepreneurs and
www.unltd.org.uk/ventures W
Venture PartnersHIP businesses sidestepping the banks
email ventures@unltd.org.uk
FoundatIon, tHe
tel 020 7566 1108
www.vpf.org.uk Wales CooPeratIVe
UK
London Centre
unltd Advantage is the
grant-making foundation dedicated www.walescoop.com
premier investment readiness
to supporting social entrepreneurs email walescoop@walescoop.com
programme in social enterprise,
and dynamic charities tel 029 2055 4955
preparing social enterprises for
Wales
introduction to the appropriate
VodaFone FoundatIon Co-operative development agency
investors. We encourage
www.vodafone.com/start/
applications from established
foundation WeaVers’ CoMPanY
social enterprises that are:
email groupfoundation@ BeneVolent Fund, tHe
seeking at least £250,000;
vodafone.com www.weavers.org.uk
scalable; sustainable and have
International email weavers@weavers.org.uk
a good management team.
makes social investments tel 020 7606 1155
UK
grant maker helping young people
at risk of criminal involvement
164 Directory Good Deals 2009: The Social Investment Almanack 165

appendix
CDFI: stands for community expenses. In some cases the DUE DILIGENCE: a thorough
development finance institution. loan is disbursed to the supplier analysis of an enterprise’s financial
CDFIs are independent of the equipment of services situation to ensure that its funding
organisations that provide financial required rather than to the application stands up to scrutiny
services to generate both social borrower themselves. Reduces
and financial returns. They supply the risk that the loan funds ENCUMbErED: when an asset
capital and business support to are being used for purposes other owned by an enterprise is subject
individuals and organisations than those expressed in the to a claim by a finance provider,
whose purpose is to create wealth loan request eg when a building is pledged as
in disadvantaged communities or security for a mortgage loan from
under-served markets COrNErSTONE INVESTMENT: a bank
an investment in an enterprise
COLLATErAL: assets pledged by or fund that has been made EQUITy: see ShArE CApITAl
a borrower to support a loan, by a usually well-known and
JarGon-Buster
which will be surrendered if the respected investor so as to GEArING: see lEvErAgE
enterprise fails to repay the loan inspire other investors to come
in with money too. Cornerstone INDUSTrIAL AND prOVIDENT
COMMUNITy SHArE ISSUE/ investors will work closely with SOCIETy: a legal form in the UK
our guide to the key words and phrases that are used in the world of social investment COMMUNITy bOND ISSUE: when the organisation and may offer which may be undergoing a name
an enterprise seeks investment business support. In some cases change soon to Co-operative
from members of a particular they may agree to lower levels of and Community Benefit Society.
community, either through returns in relation to their equity For co-op societies run for the
AMOrTISATION: the reduction finance to growing enterprises investments in one country to offering shares to be purchased than other investors, or they may mutual benefit of members (to
of debt outstanding by regular after the start-up phase but before another in order to avoid country- by them or through borrowing agree to take the first hit if things whom profits are distributed) or
payments of interest and principal the enterprise is ready to access specific risk (such as high inflation money from them. The enterprise go wrong for businesses conducted for the
such that the debt is fully mainstream venture capital (in or political turmoil) or in search can attract risk capital through the benefit of the community (profits
repaid by the end of the term terms of size of investment needed of higher returns. Capital flight sale of shares, which may bring DEbT: an amount owed. The go to the wider community).
and investment readiness). They is seen most commonly in massive with them a vote or votes, potential general name for notes, bonds, Registered by the Financial
ASSET: represents what a business often have commercial experience foreign capital outflows from dividends, and may be withdrawn mortgages and the like that Services Authority in England,
owns or is due, eg cash, securities, that they bring to support a specific country, often at times or sold on a secondary market. provide evidence of amounts owed Wales and Scotland
accounts receivable, land, building investments. Investments may be of currency instability. Often the Alternatively, it may attract debt and have definite payment dates
and equipment. A typical made individually or as part of outflows are large enough to affect capital through issuing a bond INTErNALLy GENErATED CApITAL/
breakdown of assets includes ‘fixed a group. In conventional finance a country’s entire financial system over a set period, which brings a DEbT SErVICE COVErAGE: a ratio rETAINED EArNINGS: unrestricted
assets’ referring to equipment, they often expect a high rate of commitment to repay the amount used as a tool to measure the capital that a company generates
buildings, plant, vehicles etc, return but the same rule does not CASHFLOW STATEMENT: a invested, perhaps at an agreed likelihood that a borrower will through making profits. The
and ‘current assets’ referring to cash, usually apply for social investments schedule of cash receipts and rate of interest. Examples have have enough cash available aim is for this capital to fund all
money in the bank, debtors, etc payments during a specified included wind farms, city-based to repay the loan. It is calculated working capital requirements,
CApITAL: the resources available to period. Reflects actual cash bonds and the Cafédirect by dividing the cash available and over time it may fund growth
brIDGING LOAN: a loan to provide be used to produce more resources in and out of the company – not share issue. (Community bonds after operating expenses capital requirements
finance for a relatively short time receivables or payables and are not to be confused with social by the debt service (principal
period until an enterprise obtains CApITAL FLIGHT: the movement not depreciation or amortisation. impact bonds) and interest) INVESTMENT rEADINESS: the point
longer term finance of money from one investment An important statement in in an enterprise’s development
to another in search of greater determining whether the CONTrOLLED DISbUrSEMENT: DEprECIATION: the reduction in when it has established a sufficient
bUSINESS ANGELS: also known as stability or increased returns. enterprise will have enough where the lender releases the loan the value of an asset over its useful track record that external finance
informal investors, are typically Sometimes specifically refers cash to make each loan payment funds to the borrower against life. This should be calculated for becomes an option. Prior to this
wealthy individuals that provide to the movement of money from and finance the business specific contracts or specific accounting purposes point finance is usually sourced
166 Jargon-buster Good Deals 2009: The Social Investment Almanack 167

appendix
though grants, friends and family, not deliver an efficient outcome. QUASI-EQUITy: an investment may also be provided by venture that could operate at a wholesale SOCIAL STOCK ExCHANGE: a
customers, suppliers, internally When a market mechanism based where returns depend on success, capital firms or foundations, such level to strengthen and develop location or network which enables
generated funds or the community on the pursuit of individual self- such as an agreed percentage of as UnLtd, that specialise in start- the capacity of specialist retail investors interested in social
being served interest leads to negative results future income, sales or surpluses. ups. Typically provided in order to lenders and investors to provide return – as well as financial return
for society as a whole. This can In social investment, an instrument develop a business concept financial or other support to third – to list and trade investments
LEVErAGE/GEArING: the amount be where the good or service is which shares risks and rewards sector organisations. It could help which meet certain social
of debt in relation to equity. The a public benefit; where there are between investor and investee. SENIOr LONG-TErM LOAN: loan enable third sector organisoations or environmental criteria. A
higher the amount of debt in significant externalities (side- In mainstream finance, a debt with a term greater than one year to access the finance they need specialist junior stock exchange
relation to equity, the higher the effects which have a cost or benefit investment (a loan or bond) with and which has first claim on any to grow, thrive and become more which offers social enterprises
leverage to society as whole); or if there is some characteristics of equity, collateral above any other lenders. sustainable. A social investment greater visibility to attract more
imperfect information between such as flexible repayment terms Often used for fixed assets such as wholesale bank does not exist yet ethically or socially minded
LIAbILITy: represents what is buyers and sellers and higher risks, but potentially buildings in the UK, but the government investors, and which provides
owed by the enterprise and higher returns. Examples include issued a consultation on the design a ‘secondary market’ or ‘exit
includes bank overdrafts, loans pATIENT CApITAL: this is ‘subordinated debt’ (see opposite) SENSITIVITy ANALySIS: a technique and function of such a body in route’ for those investors. An
and monies owing to suppliers traditionally interpreted in the for determining what may happen summer 2009 IT platform which allows
private sector as an equity-type rECESSION: the trough of a to a business if a key prediction/ philanthropists to speculate on
LINE OF CrEDIT: an arrangement investment where returns might country’s economic wave, which assumption in a business plan turns SOCIAL rETUrN ON INVESTMENT: where they can get the most social
between a financial institution not be expected for five to ten is generally defined by two out to be wrong a framework to help understand impact for their donations
(usually a bank) and a customer years. In the social economy this consecutive negative quarters the value of social change from
establishing a maximum loan can be interpreted as quasi-equity of GDP growth. Typical causes SHArE CApITAL: equity capital the perspective of those most SUbOrDINATED DEbT: a loan that
balance that the bank will permit (see below) or investment that is of recession are low consumer issued by an enterprise to its affected by an activity. Alongside ranks below other loans with regard
the borrower to maintain. The used to help move an organisation confidence, debt and high rates owners in the form of shares a qualitative account, it provides to claims on assets or collateral
amount of the loan is often based on off grants and on to loans or other of inflation – but more realistically, for a financial proxy value of if the business fails to repay. Often
receivables and/or stock – usually types of investment. Investors recessions are the culmination of SOCIAL INVESTMENT WHOLESALE this change, which can be accepted by cornerstone social
75 per cent of receivables and 50 per who take a long-term view are millions of people’s actions around bANK: a term used by the understood alongside traditional investors so as to encourage others
cent of inventory. Requires monthly seen as playing an important role the globe. Some undesirable government to describe a body financial costs to invest in the enterprise
reporting. Develops a close and in social investment attributes of a recession are
continuous relationship between declines in employment levels,
the bank and borrower prINCIpAL: the balance of debt decreased market-trading activity,
outstanding that is separate from decreased retail activity, decreased
MArKET ANALySIS: a key factor any interest owed on the debt. growth of personal income
in assessing credit-worthiness. The principal may be owed at a and decreased industrial activity.
It includes basic information maturity or amortise over the life
about the business’s products or of the loan rETAINED EArNINGS: see
services, customer, position in InTErnAlly gEnErATEd CApITAl
the industry and market share, prOGrAMME rELATED
major competitors and marketing INVESTMENT: charities may SECUrITy: collateral offered by
strategy. Can be segmented into: pursue their charitable purposes a borrower to a lender in case
industry description, customer through loans, guarantees, of default. Collateral may be
profile and competitive assessment. purchase of shares or letting an asset like a building, property
Ultimately should consider the of property. Although they can or equipment, or it could be
business’ market dependence, generate financial return the a personal guarantee
vulnerability and ability to sell primary motivation for making
the investment is not financial SEED CApITAL: initial capital for
MArKET FAILUrE: when a free but the furtherance of the charity’s a start-up venture, often provided
market for goods or services does objectives by founders, friends or relatives but
168 Jargon-buster Good Deals 2009: The Social Investment Almanack 169

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