We know that the impact of the Coronavirus crisis is being felt in every corner of the charity and social enterprise sector. From organisations who are working directly with vulnerable individuals in their communities who are either already unwell or at risk, and having to do so while transforming their working practices; to those who are reliant on income from events, footfall and renting space and who have seen revenue disappear, the need is acute.
Like all organisations we have spent the last two weeks focusing on ensuring that we can continue to operate effectively, and on how our work needs to change to play the most effective role we can going forwards. It is sobering to think that less than a month ago the Access team worked through the detail of an operational plan for the year ahead, without realising that the reality for charities and social enterprises was about to change beyond recognition.
Principles underpinning our approach:
In trying to understand our role in this crisis we have sought to develop a set of principles to guide our thinking:
- Firstly, we will prioritise engaging with our key partners, and listening to their changing needs. For the last five years Access has championed the concept of network leadership and this seems more important than ever right now.
- We need to be clear that, while Access has considerable resources, we are a drop in the ocean in the context of this crisis and its impact on the sector. We cannot help every charity and therefore we need to identify those to whom we have the most responsibility.
- We also understand that what most charities and social enterprises need right now is a rapid injection of grant revenue, often at considerable scale. With our own liquidity being limited we are not in a position to be able to meet this need in any meaningful way. Therefore we should not seek in general to change the way in which we fund to become a revenue funder (although we may make some exceptions to this for our closest partners if needed).
- Access’s role, since our creation in 2015, has been about plugging gaps in how enterprising charities and social enterprises are supported. That ecosystem is now changing dramatically and so it will take some time to understand where gaps will lie. Time is not something we can afford now as we consider our response and so there is a risk that our interventions are not as targeted as we would like.
- Creating new delivery mechanisms also takes time, and so we need to amend and where necessary augment our existing programmes rather than seeking to create new ones now.
Our board met on Tuesday and also reflected that in our response to the crisis Access should stay true to its mission, and recognise that we will have an important role to play in the recovery when it comes and begin to plan for that now too.
What we have done so far:
Last week we focused on making a number of significant changes to the Growth Fund. These amendments are designed to enable fund managers to provide support to social enterprises and charities in their portfolios and much-needed liquidity to organisations in the sector.
The changes include a six month interest-free period for the Growth Fund social investors on their loans from Big Society Capital and a term extension and relaxing of some of the parameters, covenants and reporting requirements of the programme.
These measures, along with others, will allow for the social investors to have discretion and flexibility to support both existing borrowers as appropriate and provide much needed liquidity into other charities and social enterprises who may need that support.
If you have borrowed from one of the Growth Fund lenders and wish to discuss your loan then speak to them directly. They will be expecting you to get in touch if they haven’t reached out to you already. Good Finance has also developed a comprehensive resource hub for charities and social enterprises.
For those charities and social enterprises who need additional liquidity, this flexibility also allows the Growth Fund to provide additional support to both new and existing borrowers. The Growth Fund is most definitely open for business. However charities and social enterprises may be better to seek support from the new government-backed Coronavirus Business Interruption Loan Scheme in the first instance. Our partners in Big Society Capital are working on ensuring that this scheme works as effectively as possible for the sector.
What we are working on:
This week we have been focusing on how our other programmes should respond to the crisis. These are mostly funded through our £60m spend-down endowment and so our capacity to respond depends on the implications on our capital and liquidity. Because of our fixed life our endowment is not invested in listed equities and so we haven’t suffered big losses on our capital. Rather it is held in fixed income with a focus (through our Total Impact approach) on charity bonds which we plan to hold to maturity. Our ability to sell these early has probably reduced as a result of the crisis and we would likely crystallise losses if we were to do so. However demand for our existing grant products will also change as a result of the new operating environment for the sector and so our liquidity position may improve as a result.
We are paying particular attention to the role that the Reach Fund can play both in supporting access to emergency liquidity for organisations who may need it; and potentially to also, additionally, support organisations who have already secured investment with specific interventions to help them respond to the crisis. We are canvassing views from social investors on the value of this and working with Social Investment Business, who run the Reach Fund, to understand the implications of this change. We have also benefitted from the work of our learning partners, the TI Group, in some detailed analysis of potential fragility across various investment portfolios may help us to understand where to target support.
We have also been engaging closely with our key partners on both the enterprise development programme and Local Access and seeking to be as flexible as possible with the programme to respond to their needs. We are still identifying the best way forward in each case and will update further here when we have an agreed position. In some cases this is likely to involve delays to projects which have not yet really got going, and in others things may accelerate.
Finally we know that social investment infrastructure itself is not immune from the pressures of the crisis. As the foundation for social investment we have a long standing commitment to support that infrastructure, especially through our partnership with the Barrow Cadbury Trust on the Connect Fund. We have been working closely with the team at the Trust over the last week on how we will support sector infrastructure and make sure that the social investment market survives the crisis to it can support the charities and social enterprises who will need it when the recovery begins.
I’ll update again next week as our plans develop further. As always please do get in touch with any thoughts on the role Access should be playing at this time.