Supporting the growth of strong and effective social enterprises is a core part of our mission.
The Cabinet Office’s Investment and Contract Readiness Fund, as well as other funding sources, have led to a renewed effort to work with the most engaged and ambitious charities and social enterprises. In November 2015, in partnership with Kin Capital, we launched the first UK wide investment fund using the new Social Investment Tax Relief.
The Bright Futures Fund
The Bright Futures Social Investment Tax Relief Fund wants to invest in enterprises that seek to improve the lives of children and young people and relieve the threats facing vulnerable communities..
Helping social enterprises and charities access capital
Social enterprises are an increasingly important force supporting and delivering high quality public services. Together, they received more than £13 billion from government bodies in 2013. More than four-fifths of the total was earned through contracts or fees. Social Enterprises account for nearly 10 percent of all local authority contracting and that is set to rise.
An active lending market already exists within the charities and social enterprises sector. Around £3.5 billion-worth of balance sheet loans were recorded in 2012/13. But to respond to this growing demand for public services, charities and other social enterprises need to access growth capital like never before.
In November 2015, we launched the Bright Futures Fund in partnership with Kin Capital. It is the first UK wide fund to use the new Social Investment Tax Relief to make investments into social motivated firms. The fund targets commercial success stories which deliver high social impact. It wants to invest in enterprises that seek to improve the lives of children and young people and relieve the threats facing vulnerable communities. To receive financial assistance, the enterprises must be: a charity or community benefit society or company providing service of clear community benefit.
To date the Bright Futures Fund has raised £1.5 million from more than 40 UK tax payers. It has made its first investment into Ability Tec, a Bolton based community interest company. Ability Tec provides contract electrical manufacturing services to more than 15 clients. The end products are gadgets such as taxi-fare meters and ipad chargers.
Ability Tec was formed in September 2012. It has created the equivalent of eight-full time jobs, with a mission to employ people with disabilities. The refinancing from the Bright Futures Fund will enable the company to grow by taking on additional staff and replacing some of its existing higher cost financing.
Gen Community, British Gas Solar and Social Finance come together to build a pipeline of £60m of solar energy projects to benefit local communities ...
There are more than 600 community energy projects in the UK but they are not structured in a way that allows access to mainstream low-cost debt bond markets. Typically, existing rental solar roof schemes do not leave any financial benefit with the local communities.
With financial support from the Cabinet Office’s Investment and Contract Readiness Fund, Social Finance is looking to raise £60m from institutional investors through a 20 year inflation linked, amortising, asset backed Social Solar Bond. Alongside the bond, there will be community share issues.
The partnership hopes to offer solar panels to potentially 8000 local government sites such as schools and town halls across the country. The panels can reduce energy bills by up to 40%. Revenues from solar feed in tariffs will be reinvested into local social enterprises and educational programmes targeting fuel poverty.
“This is an exciting chance to deliver renewable energy to a commercial standard, whilst keeping community ownership and values at the core.” James Mansfield, Gen Community
4Children was awarded a Cabinet Office Investment Readiness and Contract Fund grant, which funded work with Social Finance to develop an investment plan to support its continuing expansion.
4Children is one of the leading national children’s charities, supporting more than 100,000 families in some of the most disadvantaged communities through its 120 children centres, nurseries and out of school clubs. However, they found it difficult to find loan finance to expand its activities.
Social Finance raised £1.7m loan capital in 2014 from HSBC and the FSE Group Social Impact Accelerator Fund to fund the growth of 4Children’s operations. With this capital, 4Children hopes to open up to 50 new children centres over the next three years.
4Children will be able to offer free children services and subsidised nursery places to more than 15,000 new families each year. Surpluses will be reinvested in into 4Children’s policy and campaigning work to provide better support for the most vulnerable families.
Social Finance raised £10.1m from a large pension fund for Empower Community to buy and manage solar PV panels in Sunderland...
Heat or eat is a reality for some of the poorest people in the UK
Energy bills are rising and are putting an enormous stress on low-income families across the country. By providing solar power to social housing tenants, we can reduce bills by providing access to free daytime energy as well as reducing carbon emissions.
Empower Community has issued a 20 year amortising loan note of £10.1m which provide investors with an inflation linked annual return. The loan will enable Empower Community to buy and manage existing solar photovoltaic installations on social homes owned by Gentoo Housing Association and continue to provide solar power to 2327 social homes and six corporate buildings. The solar panels will also generate electricity for the national grid.
Access to free clean daytime energy will save tenants on average £250 per year over a 20 year period and will alleviate fuel poverty to those most at risk. With the refinancing of Gentoo’s existing PV panels, Gentoo plans to roll out solar panels to an additional 3000 homes in Sunderland. Profits from the deal will be reinvested in the local Sunderland community through a community foundation.