We are delighted to announce the launch of our 2018 Impact Report highlighting key investments and record growth. Please download the report here.
Our 2018 Impact Report shows record growth for our investment portfolio over the last 12 months, with investment volumes more than doubling to just over £11m and a further eight investments made into UK charities and social enterprises.
SASC offers flexible investment to charities and social enterprises through our Community Investment Fund (CIF) and Third Sector Investment Fund (TSIF). Since the launch of the first fund in 2014 we have invested just over £19m into 17 organisations, who are tackling some of the UK’s most difficult social issues.
In the last year SASC invested in six new organisations and offered follow-on investments to two organisations already supported. Three organisations also repaid the investment SASC provided.
Key investments from March 2017 to March 2018 include:
Affinity Trust – SASC provided £150,000 of investment capital on a risk sharing basis to this Bradford-based charity that has been supporting people with learning disabilities for 25 years.
Hull Women’s Network – SASC has made a significant investment in this charity that provides safe homes for vulnerable women and their children in Hull.
The Cornerstone Partnership – SASC provided a £500,000 loan to this nationwide social enterprise that improves the lives of children and families that come into contact with the care system.
Giroscope – SASC made a £250,000 investment in 2016 to this charity that buys and renovates empty property in west Hull to provide affordable homes to rent. Giroscope repaid this loan in August 2016. SASC recently approved a second facility of £750,000, alongside a £250,000 grant from the blended finance pilot established with partner organisation Power to Change.
HCT Group – In 2015 SASC made a £500,000 investment to HCT Group, one of the largest social enterprises in the UK providing community transport services. In 2018, SASC committed a further £2.05m (which will make it the second largest social investor in HCT Group) to an £18m capital raise.
Wheatsheaf Trust – SASC has provided a £300,000 loan to this Southampton based charity that provides support and employment services to adults and young people, as well as to more vulnerable groups such as refugees, ex-offenders, lone parents and people with disabilities.
Gawcott Fields Community Solar Project – SASC provided £575,000 of junior debt to GFCS alongside a £3m senior loan from Santander, plus a grant from SASC’s partner organisation, Power to Change. The investment package has helped finance a solar farm in Buckinghamshire which will generate energy from local renewable sources as well as financial surplus for the local community.
Heart of England Community Energy (HECE) – This is the UK’s largest community energy company set up as a Community Benefit Society (BenCom) which will benefit those in fuel poverty in Warwickshire. SASC provided £6.2m of 2 year bridge financing to acquire a group of solar farms from a large developer.
Key Lessons Learnt
Blended finance: More than just the sum of its parts
One of the lessons SASC learned over the last six years is that a blended funding approach has a vital role particularly in light of the financial constraints of many third sector organisations.
Ben Rick, Managing Director, SASC said, “We would like to inspire funders whose capital is more flexible than ours to work with us in a complementary way. We’ve seen how such partnerships make possible transactions that otherwise would never happen – enabling more disadvantaged people to access the support they need to improve their lives.”
Private and social sector partnerships
Social sector organisations can sometimes extend their reach and generate financial benefits by partnering with the private sector, but the interests of the two organisations need to be aligned.
Ben Rick said, “For SASC the key lessons are to ensure that interests are as strongly aligned as possible. Flexibility and symmetry will help a partnership to survive post-honeymoon turbulence. Under the right conditions, we believe social/private sector partnerships can produce impactful and sustainable delivery models and we will go on looking for opportunities to support them.”
Financing Payment by Results (PbR)
In recent years, Payment by Results (outcomes based commissioning) has become increasingly popular in the public sector. Financing such activities will likely become a key activity for social investors over time.
SASC has learnt valuable lessons from our involvement in financing PbR initiatives. One of these was working with a charity, Family Action who had developed a new way of working with highly vulnerable young people in care, called the Safe Haven project.
SASC worked with Family Action over several months to establish a level of comfort with both the charity and the new intervention it had designed. SASC also developed an award-winning financing model - flexible, cost-effective, performance-dependent and aligning the interests of the charity and investor.
Safe Haven operated for about twelve months off a 100% PbR model which placed all of the delivery risk on the provider and investor. In one sense, the intervention was successful. Two external evaluations of the quality and impact of its service model and of its cost-benefit profile have been positive e.g. showing that it saved double what it cost.
Unfortunately, despite this evidence, the commissioners involved decided not to renew the intervention after its first year. Given the positive feedback from the young people, birth families and professionals involved in the project and the evidenced savings generated, this suggests the commissioners may have looked at the savings in a different way.
Ben Rick said, “The key lesson from this project is how vulnerable a new PbR project can be to relationships with local authority commissioners and procurement departments, tight budgets and any changes in senior local authority buying. PbR projects are complex and involve many parties, and embedding a new PbR approach into an established public sector system brings its own challenges.”
SASC will be launching a post-investment support programme for investees; bedding down an enlarged investment team; and planning for raising and launching new funds.
SASC is actively seeking other investees who would benefit from social investment and meet their criteria - organisations that generate measurable social impact, require between £250k – £3m in investment, can’t access mainstream funding and are currently or have potential to be financially sustainable.
Ben Rick said, “We will continue developing the SASC platform and helping to bring positive change to the lives of people and communities across the UK. We hope that by sharing our own work, knowledge and lessons we can inspire others to join us on this social investment journey.”