Access commits £40m to support enterprise development in the sector

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Access – The Foundation for Social Investment has today published its new five year strategy, with a commitment to help charities and social enterprises to develop enterprise models which help increase their earned income and thereby build resilience. Access’s work will focus on those who are likely to use social investment as a tool for developing new income streams.

Access will fund a range of support, including peer learning opportunities, a knowledge base of business models which work effectively in the sector, and diagnostics. The majority of funding will be given in a variety of grant products, from small feasibility grants to test new enterprise models, to larger grants to help with detailed business planning or to seed new enterprising activity.

Set up in 2015, Access was endowed with £60m by the Government to support more organisations to access social investment.

The strategy represents an evolution in how this sort of capacity building will be delivered. In order to increase the diversity of organisations who can benefit from social investment, the support will broaden from the specifics of raising investments to help charities and social enterprises diversify their income streams around enterprising activity.

Seb Elsworth, Access’s Chief Executive said:

“Charity leaders are prioritising finding new income streams, and trading is the main area of growth in the sector. Having sustainable revenue streams is key to resilience, and it is also fundamental to taking on any sort of investment.

“This approach from Access will provide more of the support the sector is asking for, and help support the growth of social investment by building more sustainable revenue models”.

Learning from previous programmes

In developing its approach, Access has looked at the learning from other programmes focused on helping organisations raise investment, as well as its own pilot programmes the Reach Fund and the Impact Management Programme.

The Reach Fund has provided grants to over 100 charities to help them raise investment since its launch in 2016.

One of them, Hollywell Housing Trust, used their grant to unlock investment from the Health and Wellbeing Challenge Fund in the South West, run by Resonance.

Katie Sherjan, CEO, Hollywell Housing Trust, said:

“The grant from Reach enabled Hollywell to put together a robust, long term financial plan which was not only an invaluable tool to support our investment funding application for the Health & Wellbeing Challenge Fund, but also an essential part of our planning for future growth.”

The Foundation has also run two consultations with the sector since its inception in 2015, which have consistently highlighted the importance of peer learning, the need for organisations to have the opportunity to experiment with new models, and greater flexibility in how grants can be used.

The grants and support programmes will be delivered by a range of partners, including existing infrastructure bodies and support providers. In order to build a greater knowledge base about effective business models in different parts of the sector Access will take a sub-sectoral approach, and will pilot support this year in the Homelessness and Youth sectors. Other sub-sectors will be added later. Over time Access hopes to support greater coordination of capacity building activity by working with a range of other funders all interested in building greater resilience in the sector.

Blended Finance

Access also provides blended finance to the sector by investing a combination of grant and loan capital into organisations who then lend to charities and social enterprises around England. This approach helps to make social investment more relevant and more affordable for charities and social enterprises by allowing those social investors to make smaller loans and take greater risk.

This programme, called the Growth Fund, is managed by Access and funded by the Big Lottery Fund and Big Society Capital. So far, it has invested in thirteen social investment funds around England, eleven of which actively lending, with over £40m already available to charities and social enterprises in small loans and blended loan and grant investments. When the Growth Fund is fully invested it is expected to total more than £55m and social investors supported by the Growth Fund will be making loans until at least 2021.

Earlier this year it was announced that Access would receive a further £10m from dormant bank accounts to further develop its work in providing blended finance, with a focus on disadvantaged communities, and learning how the tool of social investment can most usefully help in those places.