What could Brexit mean for social investment?
Geetha Rabindrakumar of Big Society Capital thinks the lesson of Brexit should give social investors pause for thought...
Is there anything left to say about Brexit? Rightly, the rational view across the social sector is that their role is not to judge the result but to work out how best to respond. I don’t think I’m alone in having had a deep sense of unease since the referendum result, a mixture of both personal and professional reactions.
Whilst the decision was finely balanced in many areas, Brexit provided a single outlet to force change on a host of issues affecting many people that have been marginalised, including precarious employment and lack of affordable housing.
Mark Simms, CEO of P3 Charity, spoke recently of listening sessions they’ve carried out with their service users and the sense of abandonment underlying individual voting decisions. This is surely discomfiting for anyone in civil society and politics working to support these communities, and poses challenges for us all.
Brexit provided a single outlet to force change
Are charities confident that they are not part of the problem, and are genuinely placing the communities they serve in their decision making and in shaping solutions? The work of organisations such as the Manchester charity RECLAIM seems even more compelling in this light– their aim is to end leadership inequality in a generation, and enable working class young people to have a voice and to share platforms with decision makers.
So how should those of us working in social investment interpret the Brexit vote and what lessons should we learn? What is the relevance of social investment now, especially when some of the Brexit reflections around disillusionment with a London-centric elite has echoes of criticisms of the social investment world?
1) Social investors can decide where they choose to allocate funds
This may become more relevant as poorer areas of the country engage government to ensure levels of EU funding are maintained (disclaimer: social investment is not a replacement for grants).
For example our partner the Access Foundation’s aim is to increase supply of investment for smaller organisations and in places where this is not easily available. It’s been encouraging to see proposals being developed to support the sector in the South West and other specific regions in particular.
2) Increasing investment for solutions generated within communities
Impact data recently released by the School for Social Entrepreneurs on their Lloyds Bank and Bank of Scotland social entrepreneur's programme demonstrates how building bottom up change through the social economy could be done – 50% of the Fellows are working in the most deprived communities and 25% have direct experience of the social issue they are trying to address such as tackling the education and employment gap, health inequality and affordable housing for vulnerable people.
Citizens UK’s approach of developing community organisers to drive change is another example – how could social investment be made more accessible to grassroots organisations? It might seem like a stretch, but the London Community Land Trust came from these organising efforts, and is now raising community shares to help provide permanently affordable homes.
One of our specialised investors is Developing and Empowering Resources in Communities (DERiC), who provide social investment to community run organisations (to date in Belfast and Medway). More importantly, DERiC supports communities to build partnerships with public sector agencies, and enables them to harness local social capital to support vulnerable people with care needs and tackle broader local issues.
3) Tackling inequality
Charities and social enterprises have the fight against “burning injustice” at their core, and will have plenty to contribute to the agenda Theresa May outlined when accepting the role of prime minister. Social investment could be relevant in enabling much of this work to grow, whether it’s supporting high quality nurseries in deprived areas or investment into social enterprises that help address the cost of living for poorer families.
As investors there is more we can do around this – for example taking on board some of the thinking from the Young Foundation’s gender lens investing report, and considering equalities and inclusion more broadly within our investment decisions.
4) Listening and responding during uncertainty
The referendum result and economic uncertainty clearly poses significant financial and operating challenges for the social sector and there is an increased need to support the sector during this time.
Several social lenders have been quick to reiterate their support for borrowers – charities should discuss with their investors the challenges they may be facing and what flexibility may be required.
Whilst most social investment is being used outside of London, that is not the perception. We are looking to facilitate more regional conversations between charities, investors and other funders, and to hear about the reality of social investment and its challenges and opportunities in different places.
I saw that an Ipsos/MORI poll this week indicated that most people think that the economy will do better outside the EU in 10 or 20 years’ time. In the meantime, whatever comes next, the amazing yet relentless work of charities and social enterprises is surely needed now more than ever. I know the commitment of social investors to work in partnership with the sector to meet the challenge remains.
Photo credit: John Stone