In 2018, we held a Social Investment Development Day in Manchester. We discussed what people’s preferred futures were for their organisations, the overriding favourite being - a future where they are not heavily dependent on statutory funding, which tends to come with restrictions on how it can be spent together with little allowance for the cost of delivering services. I recently spoke to a senior manager of one charity, where a contract with their local authority has a built-in reduction in payments year-on-year – despite the costs of delivering the work increasing year on year! Margins for such contracts tend to be extremely tight, with sector organisations effectively subsidising local authorities.
Many senior managers now accept that a mix of grants, donations and social investment funding is the way forward. With social investment, there is more flexibility on what the funds can be used for than with traditional grants, and most social investors will agree repayment terms which fit with the organisation’s forecasts, e.g. capital repayment holidays. These funds can be used to unlock new ways of working and innovative projects to diversify income streams. They can be equally effective in strengthening back office processes, such as financial monitoring or I.T. systems, social impact measurement or improving governance procedures, all of which are difficult to fund through grants as they are not frontline work.
The Development Days included open forum discussions, which allow senior managers to share their concerns with their peers, as well as learn and receive encouragement from others facing the same challenges.
Homeless Link’s Social Investment Fund was created to provide a resource for those working to reduce homelessness in England, and to support those within the sector wishing to explore the prospects that can be unlocked through social investment. Our key advantage is that we are part of the sector, so we already know the particular issues member organisations are facing. We can offer the benefit of our expertise, as well as opportunities for peer learning and encouragement and support before and after investment.