What a Difference a Decade Makes
This guest post is written by Melanie Mills, Social Sector Engagement Director at Big Society Capital.
Melanie is leading Big Society Capital’s work to support social enterprises to engage with social investment. Formerly Chief Executive of Social Enterprise West Midlands CIC, Melanie led it from a publicly funded project to a sustainable social enterprise through four years of trading and growth. With a background of 20 years in retail Melanie has also deployed her commercial skills to run her own consultancy working with community organisations and charities to raise funds and to look at new ways of sustainable income generation. Melanie is particularly focused on busting the myth that social investment is just a London centric activity and leads on our work across the Midlands and North.
Ten Years on from Northern Rock, Jane Hartley, CEO of Vonne, recently made a clear and compelling case for continued grant investment in charities, social enterprises and voluntary organisations so that they can channel support to individuals and communities across the North East and Cumbria who need the most help. I second that, no argument from me but there is another story, with some great 10 year anniversary achievements which should be celebrated too.
They say that every cloud has a silver lining and the demise of the Northern Rock Foundation provided an opportunity to innovate and to test new ways of supporting the sector in the North East alongside grants.
The Northstar Foundation secured funds from the Northern Rock Foundation to support entrepreneurship and social enterprise in the North East of England and provides support through targeted grants, its Matched Giving and Volunteering Programme and its Fresh Ideas Funds. The North East Fresh Ideas Fund was a £3 million grant fund set up to enable voluntary, community and social enterprises (VCSEs) in the North East of England to explore new opportunities. Its aim is to improve the long term sustainability and social impact of organisations across the region and is delivered by the Community Foundation.
The North East Social Investment Company (NESIC) was created from an initial partnership between the Northern Rock Foundation, Big Society Capital and Esmée Fairbairn Foundation with a board of local representatives to help stimulate and develop the market for social enterprise in the North East. Using legacy capital from the Northern Rock Foundation, investment from the above partners and subsequently joined by Joseph Rowntree and the Northstar Foundation, NESIC launched the North East Social Investment Fund (NESIF) in 2015. The first fund of its kind in England with a £10.2 million fund set up specifically to provide investment to organisations that are passionate about making a positive social impact by taking on some of the big social challenges faced by the region. These challenges include homelessness, poverty, unemployment, health and social care, mental health, offender rehabilitation and the regeneration of deprived communities. The social investments NESIF offer range in size from £100k to £1 million. Northstar Ventures, who manage the fund, work alongside banks and other sources of finance to deliver the right package of funding to meet each organisation’s circumstances and needs.
NESIF has made ten investments since the fund was launched, most recently supporting Redcar-based The Junction with an investment of £185k to purchase its own property. The Junction runs its range of innovative services for children and young people, aiming to make a difference to their lives, by building resilience, improving mental health and transforming the lives of young unemployed people.
Lawrence McAnelly, Chief Executive of The Junction, said: “We’ve been looking at ways to improve our organisation’s sustainability for a number of years. We’ve been renting the building for almost 20 years and have grown steadily as an organisation in that time. Owning our own building will provide opportunities to grow our income further – for example by renting out the additional space we have secured or by creating opportunities for employment – which will allow us to fund work with even more vulnerable young people across Teesside.”
Finally, the Community Foundation serving Tyne,& Wear & Northumberland took over Northern Rock Foundations’ investment in the North East Social Investment Fund, worth £3 million and its £1.35 million grant funding commitment to the North East Social Investment Company. They continue to channel support and grants to charities and voluntary sector organisations from across the North East.
In Big Society Capital’s market champion capacity we have been working to help social enterprises and charities understand more about social investment, so they can have a better understanding when it might be the right type of funding. Working with VONNE and Social Enterprise Acumen key support organisations for charities, social enterprises and the voluntary sector in the North East we have run a series of Let’s Talk Good Finance workshops across the region taking in Middlesbrough, Gateshead, Durham and Newcastle. These attract a wide range of organisations from those who are just curious, to those who are clear that they will need capital to deliver for their organisations but most importantly to create the impact their customers and communities need. The most valuable parts of these events is without a doubt the ‘hear from a peer’ slots where the attendees get to hear first-hand the warts and all journey of a local VCSE that has taken on investment. There are no stupid questions, it’s informal and informative (and that’s what attendees tell us!) We don’t want this topic to be one you have to travel all the way to London to find out about! We have also collaborated with a wider range of sector partners including Locality, NCVO and SEUK to launch www.goodfinance.org.uk a website designed by social enterprises and charities to try and help navigate the relatively new world that is social investment. Hopefully a one stop shop for information, you can learn as much or as little as you need to know. It will also help to signpost organisations where repayable finance is not the right answer back to the local support agencies or to other helpful resources.
We also listened to the challenges that boards faced when thinking about taking on investment. It is risky, often new and getting your hands on trusted, independent information which can help weigh up those risk for trustees and non-executive directors who are volunteers themselves can be a challenge. To help we have our GET INFORMED – social investment for boards campaign which offers free resources, features the faces and stories of 16 different trustees from across the UK who have shared their experiences (not always good!) and we are offering free mentoring to help boards who do want to explore their options.
From my perspective as one chapter closes, another opens and it’s great to see new support sitting alongside tried and tested methods that we know work.
We are looking forward to being at VONNE’s Annual Conference on 30th November so do come over and say hello. Meeting social enterprises and charities never fails to motivate and inspire us, remembering social investment is just a tool for impact, and it is those stories of the impact that your work does that gives us the reason to do what we do.