Access exists to bridge the gap between charities and social investors, and to help more charities and social enterprises to benefit from social investment who haven’t been reached to date.
We know that social investment isn’t reaching the whole sector. There is some understanding of the gaps, for example we know that smaller organisations have tended not to benefit so much in the past. Our programmes seek to learn more about the nature of these gaps so that our efforts can be increasingly targeted to meet them. (For example see why we designed the Reach Fund in the way we did.)
In preparation for our board away-day in September we looked at some of the data about where our programmes are reaching so far. This is early data, drawn from the first 52 loans made through the Growth Fund and the first 85 diagnostics submitted on the Reach Fund. Note that not all of the organisations who submit a diagnostic to the Reach Fund will go on to receive a loan, so the Reach Fund dataset used here represents interest in the programme whilst the Growth Fund dataset includes only those applications which were successful.
As usual, our discussions at our board away-day around these early trends resulted in more questions than answers and we are now working on how our data collection can improve so we can get a more nuanced picture. However there seem to be some encouraging signs at this early stage.
Where are our programmes reaching?
The Growth Fund
Above: Geographical distribution of the first 52 charities and social enterprises to receive loans from social investors via the Growth Fund. Click the map to view an interactive version of this map with details of the investments.
The map above shows a good spread of early Growth Fund investments around England, partly as a result of the focus on the early funds that we invested in. These first 52 loans were made by the first four social investors to launch their funds. Although one of these is England-wide, one is focussed on the South-West, one on the North-West and one across the North and the midlands, and these focuses are reflected in the distribution of the loans made. The number of live funds has recently increased to nine (with an additional two signed and soon to be announced) including two more focussed in the South West, so we expect to see the impact of these in our subsequent datasets.
Above: A breakdown of loan and grant amounts received by charities and social enterprises across each region of England for the first 52 Growth Fund deals (click chart to enlarge)
The striking impression of the above chart is that the Growth Fund is showing a proportionally high level of activity by value across the North of England, particularly given the distribution of charities across England (more on this below).
The discrepancies on grant making through the Growth Fund highlight the different products offered by different social investors within the programme rather than any particular characteristic of the charities or social enterprises.
The Reach Fund
Above left: Geographical distribution of the first 85 organisations to submit a diagnostic to the Reach Fund.
Above right: Geographical distribution of voluntary organisations across the UK. Source: NCVO UK Civil Society Almanac 2017 (click map to visit source page)
Above: The regional distribution of organisations to have undertaken a Reach Fund diagnostic vs. the overall distribution of voluntary organisations (click chart to enlarge)
The above maps and graph show clusters of activity for diagnostics submitted on the Reach Fund compared, for frame of reference, to the spread of voluntary organisations across the country taken from NCVO almanac data.
These data show that at this early stage of diagnostics being submitted through the Reach Fund, there is a proportionally very high level of activity in the North East and a much lower level of activity in the East Midlands, South East and East of England. Again this may be a function of the geographical focus of the existing Access Points who refer charities into the Programme. New Access Points continue to join the programme which may influence these trends going forward.
What do the organisations look like?
The clearest way we can describe the sizes of the organisations who are benefitting from our programmes is to look at their existing income.
The Reach Fund
Above: The income of organisations which undertook a Reach Fund diagnostic and those whose applications were successful (click chart to enlarge)
The above chart indicates that the Reach Fund seems to be doing a good job of reaching predominantly small charities and social enterprises, and they seem to be relatively successful in securing a grant through the programme too.
We have also been able to compare some of this information to data from the now closed Big Potential programme. Overall the distribution of sizes of organisations submitting a diagnostic to the Reach Fund is similar to Big Potential, but with a slightly greater proportion comprised of organisations at the smaller end of the income scale.
When looking at the composition of sources of income for Reach Fund diagnostic organisations, we have looked at the proportions of income from the public sector. A rather striking pattern emerges whereby 38% of organisations have less than 10% public sector income, and 39% have over 90% public sector income, and the remaining 23% are spread across the other deciles. This polarisation between organisations highly reliant on public sector income, or not at all reliant on public sector income is not nearly as exaggerated in data from Big Potential. It is a striking aspect of the Reach Fund cohort, and we don’t yet know why!
The Growth Fund
When looking at the early data, the Growth Fund also seems to be effectively reaching organisations with smaller turnovers, with around 45% of these early loans having gone to organisations with an annual turnover of less than £200k and more than 20% to those with a turnover of less than £100k.
What are these organisations’ focuses?
To get a view on the activities which those organisations are delivering we have focused on tracking outcome areas and target beneficiary groups. We have chosen to draw a comparison to the deal level data published by Big Society Capital, as an indicator of where social investment is currently active.
The Reach Fund
Above: The percentage of Reach Fund diagnostic organisations which are focused on each outcome area, compared with BSC’s deal level data for their social investment market (click chart to enlarge)
Above: The percentage of Reach Fund diagnostic organisations which are focused on each beneficiary group, compared with BSC’s deal level data for their social investment market (click chart to enlarge)
The above graphs indicate that the Reach Fund is gaining interest from a proportionally high number of organisations which are targeting mental health and wellbeing, and citizenship and community outcomes. There is proportionally high representation of organisations aiming to support people with long term conditions, mental health needs and parents within the target beneficiary groups of those organisations undertaking the Reach Fund diagnostic.
The Growth Fund
Above: The percentage of early Growth Fund recipient organisations which are focused on each impact area compared with BSC’s deal level data for their social investment market (click chart to enlarge)
On the Growth Fund above the pattern is broadly similar, with the addition of proportionally higher representation of organisations tackling financial inclusion outcomes.
Above: The proposed use of loan (plus grant where applicable) of early Growth Fund recipient organisations (by number) (click chart to enlarge)
Finally we have looked above at the proposed use of the Growth Fund investment as reported by the charities and social enterprises. Remember that at this stage the sample size is relatively small, and there will be clear overlap between some of these functions, but a pattern is emerging that scaling up existing activities is the most common use of the loan (in some cases plus grant). Purchasing other assets and refurbishment comes next.
We are still in the very early days of these programmes, particularly in terms of the amount of data we have so far been able to collect, so our analysis poses more questions than answers. We will continue to share trends as these emerge and as always we’re keen to hear your views – you can get in touch via Twitter @si_access. We will publish more data from these and our other programmes in November as part of our next quarterly dashboard.
