This means that we consider the social and environmental impact of all of our work, including the investments we hold within our portfolio.
This Cabinet Office paper details this approach and provides examples from trusts and foundations. We will work with and learn from others who are considering or have adopted this approach and will share findings.
Our capacity building programme is funded by a £60m endowment we were given by the Cabinet Office in 2015 (this relationship has since moved to the Department for Culture, Media and Sport – DCMS). We will spend this over ten years funding programmes which help charities and social enterprises to engage with the social investment market and become investment ready. £47m has been received to date with the remainder due to be received by Access over the next few years.
Rather than simply holding these funds in the bank before they are given in grants in the later years of Access’s life, The Foundation is seeking to use them to make investments which will achieve as much social impact as possible, before being repaid and then used to make grants.
In defining the impact we are seeking to achieve, we developed a set of priorities for how the endowment should be invested which align closely with our mission of increasing the flow of capital to charities and social enterprises.
Access’s Director of Finance and Operations, has blogged on the process which the Endowment Working Group went through to develop this approach, as well as regular updates on the composition of our portfolio. We call this the bull’s eye model.
Rathbones manage the endowment for us and invest principally in social and ethical fixed income investments such as charity bonds and other ethical bonds. Over time its ambition is to shift as much as possible of the capital in the endowment to being invested at the centre of the bull’s eye. Over 45% of the portfolio was invested in the centre of the bull’s eye at 30 June 2019.
Over its first three years our endowment managed to both have positive impact and good financial performance, outperforming the target benchmarks in our investments policy statement. You can read our impact report and appendices here:
Highlights of our impact in 2018 include our investments supporting:
- The management of 80 social housing properties
- Generation of renewable energy to power 206 UK homes
- The provision of water and wastewater to 605 customers
We publish updates on the distribution of our endowment across the bull’s eye model in our quarterly dashboards.
You can read our blog posts about our endowment investment here.
Capital Preservation Fund
In 2018 Access received £10m of funds from dormant accounts to finance our Local Access programme. This money will be blended with around £15m of repayable finance provided by Big Society Capital to provide flexible capital to support the development of enterprise models for charities and social enterprises in approximately five places.
The £10m is managed as a capital preservation fund. Given the differing purpose and source of the £10m from our endowment, it was felt appropriate to manage these two funds separately. The spend of the £10m will be over a shorter period than the endowment and at the time the funds were received the exact timings of spend are relatively uncertain. However to best meet Access’s total impact objectives the Endowment Investment Committee decided to place £5m with Charity Bank and £5m with Triodos Bank. Both are committed to lending to social purpose organisations and we can therefore be assured that the capital preservation fund is strongly aligned to our bull’s eye approach.
Investment policy statements
Separate investment policy statements have been created for the Endowment and Capital Preservation Fund to make clear that they are two distinct funds with separate intentions. You can download the statements here:
What we buy
Outside of our programmes, Access’s doesn’t buy a huge amount. However, we still seek to apply our total impact approach across our procurement, for example:
- We source catering for our Away Days from social enterprises such as Crisis and Unity Kitchen
- Our printing has been done by Jericho Print and Social Enterprise Printing Ltd
- External meetings are held in social enterprise venues such as CAN Mezzanine, The LIFT and The Foundry
- Our web developers, Wave, are a values driven co-operative, and our site is hosted by Ecological Hosting, run by renewable energy