The Editor's Post: Child-lens investing: the South Yorks model with global ambitions

One of the perks of my job is that I get to speak to fascinating people who are both experts in their field and passionate about what they do. And that usually involves finding new ways of tackling seemingly unsolvable problems – an amazing pick-me-up in our rather grim times.

Such was my interview last week with Save the Children’s Mauricio Preciado-Awad and Matt Smith, CEO of Key Fund (I couldn’t have asked for better as a motivation-booster on my first day back from holidays). They talked to me about the Dream Big South Yorkshire Fund – a pilot £500,000 fund to support organisations tackling child poverty in the region, launched two months ago, which has already made its first investment. 

This fund is special for several reasons: first, it brings together unusual partners – a local authority, philanthropic funders, a social investment manager and an international NGO – providing different types of capital for a blended structure. At a time when sources of cheaper capital for blended finance are increasingly strained, managing to build such a diverse partnership is the holy grail for many impact-first investors.

The Dream Big South Yorkshire Fund is also the first child-lens investing fund in the UK, following a framework developed by and used globally by Save the Children Global Ventures (the impact investing arm of the NGO). Rather than a new concept imposed top-down to a local ecosystem, this “label” actually helps unite and coordinate the existing work done by organisations and funders in the region to tackle child poverty, Preciado-Awad tells me.

And what I find really interesting about this pilot is how it will be used to experiment and learn: we know there is child poverty in South Yorkshire; we also know that social enterprises and charities are among the most impactful organisations to tackle it; and we know that they could benefit from capital to become more sustainable and grow, Preciado-Awad explains. But what we know less about is what type of finance they need: is the market out there ripe for £20m worth of loans? Or is there a need for more tailored finance for organisations that still need some grant funding alongside investment, or need technical support before they can take on repayable capital? 

The pilot is aiming to find this out: what type of finance suits what type of organisation, and how we can provide them with the right capital at the right time. It will try out grants, loans, blended finance, microloans and even a social outcomes contract. See what works, what doesn’t, and what needs to be done differently.

This is how the significance of this fund goes well beyond a single local authority, and well beyond half a million pounds worth of capital: those learnings will inform how child-lens investing can work not only in other UK regions, but around the world, Preciado-Awad explains.

The importance of finding the right type of capital for each social enterprise is also the theme of a piece written this week by Brigit Helms, the executive director of the Miller Center for Global Impact. She explores the story of safe drinking water social enterprise Jibu, and how turning down investment that wasn’t right for the organisation later enabled it to secure a deal that put the business on the path to success.

Helms writes: “In impact investing, the question is not simply how much capital flows into the system, but how well that capital fits the businesses it is meant to serve. When that alignment is right, capital becomes a catalyst for growth, resilience, and lasting impact.”

This week's top stories:

‘We want this to be global’: How South Yorkshire is building a blueprint for child-lens investing around the world

Why capital fit matters more than capital access 

Scotland’s forthcoming social economy strategy must be backed by funds and ‘bold new ideas’

Top image: Magnific