An overview of the fundraising and social investment channels available to social enterprises.

1. Funding for Social
Enterprise
AN OVERVIEW

2. A starting point
 Social enterprises are meant to make money from trading
 The social investment market is big and growing
 Grants are also available……
 But socents wholly reliant on grants are unlikely to succeed
 Find an incubator or accelerator
 Look for your angel
 A mix of social investment / grants and trading income could be a good place to
start

3. Social investment
 Social investment is the use of repayable finance to help an organisation achieve a
social purpose
 Social investment is repayable, often with interest. Charities and social enterprises
may generate a surplus through trading activities, contracts for delivering public
services, grants and donations, or a combination of some or all of these. This
surplus is then used to repay investors
 Social investment is not a grant or a donation

4. Types of social investment
 Borrowing (debt) - taking out a loan which you agree to repay over a set period of
time. Most debt investments are paid back with interest - a fee you pay to the
investor for the use of their money. E.g. an investor loans your organisation
£10,000 and you repay a total of £11,000 at £229 per month over 4 years
 Shares (equity) - selling shares in your organisation to an investor. Equity investors
receive a share of any profits paid out by the organisation and get to have a say in
how the organisation is run. E.g. an investor pays £10,000 to own 10% of your
organisation

5. Social investment providers
 Charity Bank
 Key Fund
 Art Business Loans
 CIP Investing in Impact
 Triodos Bank
 Charity Bank
 CAF Venturesome
 PICNIC
 Co-operative &
Community Finance
 Social Investment
Business
 UnLtd
 Resonance
 Unity Trust Bank
 Sporting Capital
 Arts & Culture Finance
(Nesta)
 AHF (Architectural
Heritage Fund)
 Heritage Trust Network
 BCRS Business Loans
 Social Investment
(Homeless Link)
 Big Issue Invest
 CAN Invest
 RBS Social & Community
Capital

6. Profile:
 Vision: Impact-led Organisations can get what they need to improve people's
lives.
 Our Mission: We help impact-led organisations improve people's lives.
 We do this by:
- Providing the money and support they need directly
- Working with partners to support effectively
- Using our knowledge to inform our own work and influence others
 Example Fund: First Steps Enterprise Fund

7. SIB First Steps Enterprise Fund
 First Steps Enterprise Fund (FSEF) is a £300,000 pilot fund to support community organisations. SIB
manages fund on behalf of the ASDA Foundation
 Who is it for? Community organisations (charities and social enterprises) based in England that are
looking to take on their first loan to help them grow and become more sustainable. Particular
preference is given to organisations that work in the following areas:
1. Older people
2. Health and wellbeing
3. Employment for young people
 Funding packages of up to £30,000 are available (90% loan and 10% grant). The loan element is
charged at 5% (fixed) to be repaid over a period of 4 years with an optional capital holiday for the
first year

8. Grants
 A grant is a quantity of money, i.e., financial assistance, given by a
government, organisation, or person for a specific purpose. Unlike a loan,
you do not have to pay back the money
 Some Trusts and other grant providers (e.g. National Lottery Community
Fund) make grant funding available to socents)
 Grants are given for a specific purpose (project delivery) and often have
strings attached (e.g. achievement of outputs / outcomes, submission of
reports and detailed financial and administrative and monitoring
requirements)
 Other application criteria will apply (length of time established, annual
accounts, independent Trustees etc.)

9. Some grant providers
 Arts Council
 National Lottery Community Fund
 BBC Children in Need
 CAN Invest
 Comic Relief
 Community Foundations
 Esmée Fairbairn Foundation
 Garfield Weston Foundation
 Henry Smith Charity
 The National Lottery Heritage Fund
 Paul Hamlyn Foundation
 Power to Change
 Lloyds Bank Foundation
 Santander Foundation
 Sport England
 Tudor Trust
 UnLtd

10. Profile:
 Mission “We are an independent charitable trust that supports and
develops community businesses in England”
 10 year endowment from NLCF to focus on ‘Community Business’
 Success at the end of our ten years would mean that community business
is a better recognised and more highly valued approach to addressing
local economic, social and environmental challenges. We think this will
then prompt others to build on the work we have started
 Example programme: Bright Ideas Fund

11. Bright Ideas Fund
 The Community Business Bright Ideas Fund is delivered by a consortium including Co-
operatives UK, Plunkett Foundation and Groundwork UK, led by Locality and jointly
funded by Power to Change and the Ministry of Housing, Communities and Local
Government. It aims to give community groups in England the support necessary to start
setting up their community business
 Groups accepted onto the programme will receive tailored business development support,
mentoring and visits and can apply for a small grant of up to £15,000 to fund
development and start-up costs
 Next round 2020
 Guidelines - https://www.powertochange.org.uk/wp-content/uploads/2019/07/190125-
PTC-Bright-Ideas-Applicant-Guidance-AW-ROUND-6.pdf

12. Local grants
 The Princes Trust - start-up funding offer of 5k loan from the start-up loan company.
£150 test trading grants. Contact: Rosa.Leivas@princes-trust.org.uk
 The Sir Thomas White Loan Charity – provides loans for new business ideas and young
businesses needing investment. Up to £20,000 for business and up to £10,000 for
education. http://www.stwcharity.co.uk/
 NBV – grant for new business (requires some match funding) https://nbv.co.uk/start-
up/grant-new-business/
 LLEP Business Gateway – how to access finance http://www.llepbizgateway.co.uk/how-
to-access-finance/ & http://www.llepbizgateway.co.uk/starting-a-business/start-up-
funding/
 The Harry James Riddlestone Charity of Leicester https://www.harryriddleston.org.uk/

13. Tips and Hints
 Allow plenty of time
 Choose your funder carefully – ensure there is a ‘fit’
 Get advice at an early stage and from a range of sources
 Plan, plan and plan some more
 If appropriate, get the right partners
 Have well-defined objectives (Theory of Change)
 Consider the impact and outcomes from your proposal
 Include evidence for need / consultation etc.
 Tell a compelling story – be people focused
 Justify your methods (deliverables and budget)
 Get your proposal reviewed

14. Business Angels
 Typically wealthy individuals, business angels (or angel investors) aim to help
entrepreneurial individuals succeed with a business idea by investing their own
money
 They invest their time as well as provide connections to their larger network in
order to help guide the entrepreneur in the new business venture
 https://www.angelinvestmentnetwork.co.uk/
 https://www.clearlyso.com/
 http://www.em-ba.co.uk/

15. Social Investment / Grant Information
 Good Finance - https://www.goodfinance.org.uk/ “Our mission is to help charities &
social enterprises navigate the world of social investment.”
 Directory of Social Change – https://www.dsc.org.uk/funding-websites/ various
directories of grants providers, Trusts and Foundations etc. Subscription required.
 Funding Central - www.fundingcentral.org.uk NCVO managed online directory of grant
and loan opportunities. Subscription required.
 Funding Information - http://www.fundinginformation.org/ “detailed and up-to-date
news and information about new sources of funding for all those involved in raising
money for not for profit organisations throughout the UK.” Subscription required.

16. Some Funding Trends
 Funders more and more interested in social impact
https://www.goodfinance.org.uk/measuring-social-impact
 Impact investing gaining traction amongst private investors
https://www.youtube.com/watch?time_continue=33&v=rGmxOFYaC2Q
 Social impact bonds still flavoursome but no longer flavour of the month
https://www.youtube.com/watch?v=E6GrQtCh83w
 Match funding an increasing necessity
 More Trusts and Foundations getting interested in social investment
 Post Brexit quagmire – whither the Shared Prosperity Fund?