Big Society Capital's 2015 social investments hit £68m

Big Society Capital (BSC) invested £68m in charities and social enterprises in 2015 according to its latest Annual Review, which was published today. This is almost double the £36m invested in 2014.

BSC was founded in April 2012 with the aim of investing in social investment intermediaries, such as Resonance, who then use this capital to invest in charities and social enterprises across the UK. It also has the remit of acting as a market champion and aims to increase awareness and knowledge of social investment. 

The 2015 Annual Review reveals that the cumulative amount drawn down from BSC and its co-investors was £195m in 2015, reaching over 270 charities and social enterprises. Of the organisations to receive investment 77% are asset-locked charities and social enterprises and 11% are non asset-locked social enterprises. The remaining 12% went towards management fees paid to intermediaries and capital for arrangers (the providers of funds in the syndication of a debt).

The way the capital has been deployed varies. For example, 41% of the investment was made available to charities and social enterprises through funds and social banks, 39% through the purchasing of property that has improved charitable service delivery and 8% went into structuring social impact bonds.

Cliff Prior_Big Society Capital

Earlier this year the former boss at UnLtd Cliff Prior (pictured above) took on the role of BSC’s CEO. He said: “Our job is to make sure that charities and social enterprises can borrow the money they need to do more of their wonderful work... Working from the ground up with the social issues and the people trying to solve them, will mean we can see where and how social investment can play its part. We want to reach a point where social investment can be a valuable and readily accessible tool in the toolbox of every charity or social enterprise.”

Social investment is not just about numbers. It is about people

The 2015 review states that the cumulative amount of investments signed by BSC and its co-investors – this is the money available to charities and social enterprises – is £587m across 48 different deals.

Sir Harvey McGrath, chair of BSC, said: “Social investment is not just about numbers. It is about people – people who are using social investment as a tool to help their organisations do more; people investing for social impact; and the people whose lives are made better by the work of charities and social enterprises. It’s great to hear these stories and see how social investment is changing the lives of people and communities.”

One of the areas BSC has focussed on is housing. For example, Homes for Good used social investment from Impact Ventures UK and Charity Bank (both of which have received investment from BSC) to buy and refurbish properties, which it then rents to vulnerable people on low incomes. So far 124 people have been housed since the investment, of which 53% have had a history of homelessness.

In the report CEO of Homes for Good Susan Aktemel stated: “I wanted to show that you can have a commercially viable business that was given funds for investment, but keep a strong social impact. The banks felt that because we have tenants on housing benefit that was a high risk. Which is why we went for social investment. We’re now starting to think what we could do that in a bigger way in other parts of the UK. We want to have the maximum social impact we can.”

Other social investment milestones marked in the review include; the launch of Access, the Foundation for Social Investment and its £45m Growth Fund offering affordable unsecured loans to charities and social enterprises and the GET IT campaign, which aims to raise awareness about Social Investment Tax Relief (SITR).

Transparency has also been on BSC’s wider agenda over the past year following feedback urging the organisation to be more open. In his opening message to the report, McGrath wrote: “We are now responding to what we heard, publishing more data about our investments, refreshing our website and committing to new activities such as an annual open town hall event, where everyone will be welcome to come and discuss our future strategy with the Board, the first of which will take place this autumn.”

One of Prior’s first actions as BSC’s new CEO has been to launch an extensive stakeholder survey to gain a greater understanding about how the organisation needs to evolve. The results of this have yet to be released.

To read the 2015 Annual Review in full, click here.


Header image: K10, an organisation that has taken on social investment to grow its social business that supports apprentices in the construction industry

Photo credit: Matthew Herring