One of the findings coming out of our consultation exercise very strongly was the importance of having a healthy combination of support and challenge from an organisation’s non-executives. For Access, our Trustees have provided just that ‘across the board’, and in particular, last week’s discussion to agree the strategy for our capacity building programmes in the first few years was very thorough and constructive.
What I’ve shared below are the bare headlines: over the next few months, we’ll be hard at work building out the details, and getting each strand up and running, and of course then sharing more details about timescales and application processes.
For 2016-2018, we’ll be funding programmes in four areas:
1. ‘Ecosystems’ of coordinated support and investment
We have heard time and time again through the consultation that charities and social enterprises don’t know where to turn to access social investment. The range of intermediaries can seem overwhelming and each seems to provide a different product of service aimed at different stages on the investment journey.
We believe that one way to address this is by better coordinating the availability of investment readiness support with investment, especially for those charities and social enterprises seeking to raise less than £150k, through a range of intermediaries operating in different places and supporting different parts of the sector. We want a charity or social enterprise interested in raising investment to be able to speak to an intermediary and be able to access support whether they are investment ready now or whether they need some support to become ready, and not be constantly referred elsewhere.
From next spring, Access will therefore invite intermediary applicants (single organisations or partnerships) to apply for both the Growth Fund and a pool of grant to support investment readiness for charities and social enterprises seeking to raise under £150k. This will be the biggest element of our capacity building programme for the first few years.
In addition to streamlining the process of accessing social investment for charities and social enterprises, there are a number of other reasons for us trailing this approach:
- We think that more closely aligning the tailored investment readiness support for an individual charity or social enterprise with the investor can help to make it more focused, more efficient and possibly better value. We will compare our learning to that from other investment readiness programmes to test this.
- We want to complement Big Potential over the next few years and believe that this approach will largely support organisations seeking to raise smaller amounts.
- It makes sense that Access should seek to coordinate our two programmes as much as possible (one focused on stimulating supply of investment and one on demand) to ensure that we can have the maximum impact for charities and social enterprises seeking to raise under £150k.
- There is clear demand for this from our existing applicants to the Growth Fund, some of whom have raised the question of whether we can support this.
There is lots for us to now do to design the application and assessment process for intermediaries, as well as refining the specific measures of success for the programme. We want to be open to a range of approaches to how this support can be delivered, and we are also very aware that there are risks of closely aligning the investment readiness decisions. Specifically we need to avoid perverse incentives such as giving an investment readiness grant to an organisation who doesn’t really need it, or encouraging an organisation to take out a loan for whom it’s not the right solution. Our investment readiness support aligned to the Growth Fund will target ‘goldilocks’ organisations, not those who could already raise investment, and not those who are just too early stage, but those with the potential to raise investment of up to £150k and who need some help in getting there.
If you have already applied for the Growth Fund we will be in touch in due course to discuss the implications of this with you. This will be largest part of our programme, but we will also work on three other themes in the first few years:
2. Supporting Impact Management
The need to help charities and social enterprises to quantify, report on, increase and ‘get paid for’ their impact has been another overwhelming theme coming from our consultation. We therefore plan to build on the learning from the Impact Readiness Fund, and other similar programmes, to develop an England-wide programme aimed at supporting charities and social enterprises with their impact reporting requirements (or future reporting requirements), and embed the use of impact data in the overall performance management of the organisation.
We plan to tender for a partner to run this programme for us and will publish more information in due course.
3. Social Investment Education
This theme is another answer to the key question posed in the consultation by charities and social enterprises: ‘where do I turn to access social investment?’ We will work with a broad range of partners to scope and build more ‘accessible’ educational materials and signposting services for new entrants to the world of social investment.
4. Investment to support the Social Investment Market itself
Social investment intermediary organisations are critical to the long term development of the social investment market. Many have their own investment needs and there has been a lack of supply of this sort of support. Addressing this gap has been part of Access’s strategy since our inception. We plan to use a portion of our grant resource and work with other funders to create a long term patient investment product for intermediaries to help build their sustainability and resilience. We will begin work on this later in 2016.
No doubt those of you reading with an interest in accessing this support or potentially delivering some of this work will have many questions. If so, please do get in touch. I’ll be sharing details of timings and next steps in my next blog post in a fortnight’s time.