Putting it into debt in a time of crisis. Putting profit before people. It was an understandable position to take; George Osbourne was telling us about how paying down the nation’s own debt was the most important thing in the world, the banking system had only narrowly missed a complete melt down, and stories of corruption and mismanagement were rife. So, given that backdrop, how did I go from being such a cynic, to leading Homeless Link’s proposal to become one of the first sector-based, non-financial organisations to set up its own social investment fund? It has been a journey!
My first interaction with social investment was with the London Rough Sleeping Social Impact Bond, where I was asked to go to a meeting at the Department for Communities and Local Government (DCLG) to help frame the outcomes. I had all the usual questions, including: ‘if we know what we want to achieve, why can’t commissioners just trust providers to get on with it?’ As the contracts went through and the projects got underway, I was fortunate enough to see some of the project teams in action.
The role of the investor in ensuring accountability, alongside the focus on the outcome and not the process, gave me food for thought. There was a clear shift in the power dynamic: away from commissioners telling people what to do in terms of staff numbers and hourly rates, towards an outcomes-based approach. This, alongside some of the excellent results achieved, was very encouraging.
At the same time, central government was talking about social investment as the new future for ending homelessness. While I knew that couldn’t be true, I could not ignore it. And Homeless Link was clear that, for good or for bad, we had to the let the sector know about it.
From 2014 to 2016, we ran a number of seminars up and down the country. The purpose was to help people learn about social investment, and understand whether it was right for them. We worked in partnership with Big Society Capital and a range of social investors and their investees. Together we learned about big capital projects, small innovative expansions, more social impact bonds and in some cases, about how social investment unlocked capital, allowing an organisation to work with its beneficiaries - completely free of any statutory funding.
We were looking for success stories, but the take home message was clear:
- Funding comes from a range of sources
- There are other alternatives to grant funding, statutory contracts and conventional loans, and
- To be sustainable, organisations needed to know how to use each of these to the best effect.
So why did Homeless Link set up an investment fund again?
Because as the membership body for homelessness and supported housing organisations in England, it is important for us to be able to walk the walk - and that we too take on social investment, and become a lender. Our aim is to learn, and to find out where it works and where it fails. Most importantly, we want to be a trusted partner that walks with you on that journey of lending and learning.
Our social investment fund will formally launch, on 19 June 2017. There you can find out much more about our ambitions for this fund and how you can get involved.
Having started as a cynic, I’m now healthily curious about how we can make this opportunity work for all of us - and how it can improve our thinking, our business savvy and relationships with our commissioners.