MONEY! MONEY! MONEY! The Social Investment Revolution
"....all the things I could doif I had a little money...."Benny Andersson & Bjorn Ulvaeus
Huge changes are currently occuring within the Civil Society sector:
The termination of conventional sources of funding for many organisations, A much harder emphasis upon performance metrics: results-driven and impact-led,The migration of many services to a competitive TMPF tendering basis,....and the challenge of the Big Society Project, amongst others.
Encompassing ALL of these changes is the REVOLUTION occuring in the FINANCIAL and INVESTMENT environment within which Civil Society organisations operate.
It is, I believe, a revolution in the opportunities available to ALL Civil Society organisations (not just charities) and, along with the other major changes currently occurring, will forever alter the structural landscape within which the sector operates.
I am well aware of the current reality that for some, funding is being cut or is ending, that people are losing their jobs and that some organisations involved with good causes will not be in existence six months from now.
These matters are not under discussion here: neither is the associated political dimension or rhetoric.
I gave a short presentation recently in Liverpool on Social Investment and how I felt that it represented a substantial opportunity for Civil Society organisations.
Under principal discussion was the Big Lottery Transition Fund.
Note the word "transition".
"The Great Transition" is a phrase often used by Nat Wei - a leading architect of Big Society and an advisor on such matters to the UK Coalition Government.
But a "transition" to WHAT exactly?!
I suggested a transition to the following:
a more resilient Civil Society,a more commercial Civil Society,a more "enterprise aware" Civil Society, anda Civil Society considerably less dependant upon government funding or other grant-making sources.
For many charities and social enterprises, conventional grant funding will be replaced by some form of "social investment" finance: potentially payable on a performance basis.
We have already seen a number of traditional grant-making organisations and charities forming "social investment" operations or investing in them: the Esmee Fairbairn Trust and Big Issue Invest to name but two.
I mentioned some "hot" words and phrases at my presentation, here are some of them:
A Minister for DecentralisationThe "Giving" Green PaperCommunity Asset TransferLocalism BillPersonalisationGP CommissioningCommunity Investment & Tax Relief....and naturally: The Big Society Project
Some of these are "children" of the Big Society Project, others have been on the agenda for some time. What they ALL represent however, is CHANGE on a massive scale for the Civil Society sector.
....and where you get CHANGE you also get OPPORTUNITY.
If YOU do not believe that there ARE opportunities available then consider how Social Impact Bonds could be used to solve THIS Social Problem: problem = opportunity = solution.
What the changes ISFS also represent is some form of financial COST:
a cost in the transfer of assets and powers to communities,a cost in new ways of delivering health and social care services,a cost in GPs learning and adapting to procurement processes, anda cost in Civil Society organisations learning how to tender for local government services in a competitive marketplace.
Am I making too much of an ass-umption in expecting the blossoming Social Investment sector to finance some of these costs and changes imposed by Big Society?
This is ESPECIALLY important as Liverpool is one of the "Vanguard Areas" of the Big Society project and will be a major battleground for the success (or failure) of the project.
Here are three examples of how Social Investment organisations are preparing for this period of change - "The Great Transition"... in a Big Society context:
A 100% mortgage for Civil Society organisations
Triodos Bank in conjunction with Social Investment Scotland can make available a mortgage facility of up to 100% to Scottish Civil Society organisations for property purchase.
OK, Scotland is not Merseyside: BUT, there are plans for a similar scheme to be introduced in Liverpool.
Growth capital, working capital and capital for "difficult" periods
The CAF Venturesome Social Investment Fund is proving itself as an innovative, though smaller, lender to the sector.
Full disclosure by banks of their investment and lending activities
This was a recommendation of the Social Investment Task Force in April 2010: but why is it important?
How much money did banks lend in the Royal Borough of Kensington & Chelsea last month compared to North Birkenhead....or Toxteth?
....that's why it is important: Corporate Social Responsibility (CSR).
The award-winning Charity Bank should be congratulated for adopting this lending policy: it publishes details of every loan that it makes.
A pity perhaps that not more US investment banks did not do this when they were lending to the sub-prime mortgage sector prior to the banking crisis.
So it's obvious that Social Investment ISO20KF is here to stay, that it is a fast-growing developing sector AND that IT WILL BE financing a considerable part of the transition to a "different" Civil Society environment.
Perhaps it wont be long before we see the Charities or Social Enterprise Sector listed on the back pages of The Financial Times as a valid industry classificiation?
....or a Social Enterprise Stock Exchange?
Huge changes are currently occuring within the Civil Society sector:
The termination of conventional sources of funding for many organisations, A much harder emphasis upon performance metrics: results-driven and impact-led,The migration of many services to a competitive TMPF tendering basis,....and the challenge of the Big Society Project, amongst others.
Encompassing ALL of these changes is the REVOLUTION occuring in the FINANCIAL and INVESTMENT environment within which Civil Society organisations operate.
It is, I believe, a revolution in the opportunities available to ALL Civil Society organisations (not just charities) and, along with the other major changes currently occurring, will forever alter the structural landscape within which the sector operates.
I am well aware of the current reality that for some, funding is being cut or is ending, that people are losing their jobs and that some organisations involved with good causes will not be in existence six months from now.
These matters are not under discussion here: neither is the associated political dimension or rhetoric.
I gave a short presentation recently in Liverpool on Social Investment and how I felt that it represented a substantial opportunity for Civil Society organisations.
Under principal discussion was the Big Lottery Transition Fund.
Note the word "transition".
"The Great Transition" is a phrase often used by Nat Wei - a leading architect of Big Society and an advisor on such matters to the UK Coalition Government.
But a "transition" to WHAT exactly?!
I suggested a transition to the following:
a more resilient Civil Society,a more commercial Civil Society,a more "enterprise aware" Civil Society, anda Civil Society considerably less dependant upon government funding or other grant-making sources.
For many charities and social enterprises, conventional grant funding will be replaced by some form of "social investment" finance: potentially payable on a performance basis.
We have already seen a number of traditional grant-making organisations and charities forming "social investment" operations or investing in them: the Esmee Fairbairn Trust and Big Issue Invest to name but two.
I mentioned some "hot" words and phrases at my presentation, here are some of them:
A Minister for DecentralisationThe "Giving" Green PaperCommunity Asset TransferLocalism BillPersonalisationGP CommissioningCommunity Investment & Tax Relief....and naturally: The Big Society Project
Some of these are "children" of the Big Society Project, others have been on the agenda for some time. What they ALL represent however, is CHANGE on a massive scale for the Civil Society sector.
....and where you get CHANGE you also get OPPORTUNITY.
If YOU do not believe that there ARE opportunities available then consider how Social Impact Bonds could be used to solve THIS Social Problem: problem = opportunity = solution.
What the changes ISFS also represent is some form of financial COST:
a cost in the transfer of assets and powers to communities,a cost in new ways of delivering health and social care services,a cost in GPs learning and adapting to procurement processes, anda cost in Civil Society organisations learning how to tender for local government services in a competitive marketplace.
Am I making too much of an ass-umption in expecting the blossoming Social Investment sector to finance some of these costs and changes imposed by Big Society?
This is ESPECIALLY important as Liverpool is one of the "Vanguard Areas" of the Big Society project and will be a major battleground for the success (or failure) of the project.
Here are three examples of how Social Investment organisations are preparing for this period of change - "The Great Transition"... in a Big Society context:
A 100% mortgage for Civil Society organisations
Triodos Bank in conjunction with Social Investment Scotland can make available a mortgage facility of up to 100% to Scottish Civil Society organisations for property purchase.
OK, Scotland is not Merseyside: BUT, there are plans for a similar scheme to be introduced in Liverpool.
Growth capital, working capital and capital for "difficult" periods
The CAF Venturesome Social Investment Fund is proving itself as an innovative, though smaller, lender to the sector.
Full disclosure by banks of their investment and lending activities
This was a recommendation of the Social Investment Task Force in April 2010: but why is it important?
How much money did banks lend in the Royal Borough of Kensington & Chelsea last month compared to North Birkenhead....or Toxteth?
....that's why it is important: Corporate Social Responsibility (CSR).
The award-winning Charity Bank should be congratulated for adopting this lending policy: it publishes details of every loan that it makes.
A pity perhaps that not more US investment banks did not do this when they were lending to the sub-prime mortgage sector prior to the banking crisis.
So it's obvious that Social Investment ISO20KF is here to stay, that it is a fast-growing developing sector AND that IT WILL BE financing a considerable part of the transition to a "different" Civil Society environment.
Perhaps it wont be long before we see the Charities or Social Enterprise Sector listed on the back pages of The Financial Times as a valid industry classificiation?
....or a Social Enterprise Stock Exchange?
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