Since 2017, Homeless Link has assisted organisations supporting people experiencing homelessness with blended finance loans and grants to help these organisations to grow, strengthen operations, and increase impact. This investment has enabled organisations to build capacity, diversify income streams and trading activities, and develop or transform their assets.
Now, through the Social Investment Fund Legacy programme, Homeless Link continue to help members build their understanding of social investment and increase confidence to access it. To better understand the barriers, challenges and opportunities organisations face in accessing social investment, facing the sector, Homeless Link are undertaking short-term research.
Case studies
Social investment has enabled many organisations to retain control over assets, invest in long-term solutions, build more sustainable income streams and improve long term financial stability.
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Case study: Leeds Action to Create Homes (Latch)
To date, Latch has refurbished over 112 properties, supported nearly 500 people and delivered training through its C-Step (Construction Skills Training Employment Pathway) programme, helping participants gain skills, confidence and work experience.
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Case Study: Your Place
Your Place used social investment twice to deliver on strategic aims to develop new specialist housing when grants alone could not cover the full cost. Social investment allowed the organisation to bridge funding gaps, unlock capital grants and move projects forward.
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Case Study: The Archer Project
Homeless Link supported the organisation to access grant funding through the Enterprise Development Grant programme to develop its social enterprises and improve trading income opportunities.
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Case Study: Doncaster Housing for Young People: Building Hope, One Home at a Time
With support from Homeless Link, DHYP began a journey to diversify income and grow the impact of the organisation.
What is Social Investment
Why Social Investment?
As grant funding becomes less certain, charities, social enterprises and other social purpose organisations are considering new ways to ensure they can continue to provide essential services and support to the communities they serve. Social investment gives access to funding for organisations supporting people who experience homelessness to develop services, grow income, or invest in buildings and infrastructure. It is not a replacement for grants or public funding, but for some organisations it can be a useful tool that sits alongside other income streams.
Uses of Social Investment
Kick-start an organisation or project
Provide early-stage funding to help launch a new organisation or initiative that addresses homelessness.
Buy, develop or refurbish buildings
Invest in property acquisition, development, or refurbishment to create or improve spaces that deliver homelessness services or housing.
Purchase assets such as equipment
Fund essential equipment or physical assets needed to run or expand services effectively.
Expand service provision
Enable organisations to grow their capacity so they can support more people or offer additional services.
Increase business development opportunities
Support strategic activities that help organisations strengthen partnerships, diversify income, and secure new opportunities.
Develop social enterprises to generate unrestricted income
Invest in social enterprise initiatives that create sustainable income streams to support core charitable work.
Bridge gaps in cashflow, such as delayed contract payments
Provide short-term finance that helps organisations manage temporary funding delays without disrupting services
Test new models, supporting innovation and growth
Fund pilot projects that allow organisations to trial new approaches and scale effective solutions.
Use cash upfront to maintain cash flow and cover core costs
Offer upfront funding that helps organisations maintain stable operations and cover essential running costs.
Types of social investment
Borrowing (debt)
- When an organisation takes out a loan and agrees to pay it back over an agreed period with interest. Loans can be either secured or unsecured.
- A secured loan is when the borrower uses a tangible asset such as a building or equipment as collateral so they can acquire a loan.
- An unsecured loan is when the organisation taking on an investment without collateral, (i.e. the loan is not secured against an asset such as a building or equipment)
Shares (equity)
When an investor buys shares in an organisation.
Equity investors receive a share of any profits paid out by the organisation and have a say in how the organisation is run.
Is social investment right for your organisation?
Social investment is generally not suitable for:
- Core services without guaranteed income
- Organisations already under financial pressure
- Short-term funding gaps without a clear repayment plan
Before considering social investment, organisations need to have a:
- Clear idea about what the investment will be used for and how much money is need
- Reliable income stream to meet repayments and create a surplus to contribute towards sustainability
- Strong financial planning including financial modelling and risk assessment
- Clear and robust business model and plan
- Understanding and oversight of the Board and key staff personnel
Why work with Social Investors
Investors are interested in both:
- the social impact an organisation achieves
- The organisation’s ability to repay the investmentMany charities and social enterprises can access finance from mainstream banks to help deliver social impact. If borrowing from mainstream sources is available to an organisation, then this might be a cost-effective way to finance social business.
However, there are many charities and social enterprises that cannot access finance from mainstream lenders, hence could benefit from taking on investment from social investors.
Social investors often bring additional skills, insights and access to networks beyond the finance they provide. They may offer support such as social impact measurement expertise, capacity building, financial systems and controls and help to strengthen Board’s skills and organisational sustainability.
Past investments
The Homeless Link Social Investment Fund
In 2017, the Homeless Link Social Investment Fund (HLSIF) was set up which invested in charities and social enterprises working to reduce homelessness. This was one of the first sector based social investment fund from a non-financial organisation, generating valuable learning.
HLSIF was created to test and learn where social investment can be most effectively used alongside other forms of funding to improve outcomes. It supported organisations to:
- increase the sector’s knowledge and experience of social investment
- develop new models for income generation and funding
- improve their long-term sustainability
The fund in the form of blended finance, with 30% grant funding and 80% repayable loan mix focused on the potential that smaller unsecured loans can have on creating change. The fund offered unsecured loans of £25,000 to £150,000, repayable over a maximum term of 48 months.
Through this fund, Homeless Link awarded £1.8million to 21 organisations.
Thrive Together Fund (also called Enterprise Growth for Communities programme)
The Thrive Together Fund provided unrestricted funding to unlock the growth of small and medium sized charities and social enterprises. This fund operated through a delivery partnership made up of Social Investment Business, the Architectural Heritage Fund, Co-operative and Community Finance, Fredericks Foundation, Groundwork and Homeless Link.
With £6m available, the Fund combined grant funding with repayable finance providing a funding package of loan (75%) and grant (25%) to eligible organisations in England to improve people’s lives, or the environment in which they live.
The Fund was supported by £3.6m from Access – The Foundation for Social Investment through the Enterprise Growth for Communities Programme, alongside a £3m investment by Social Investment Business Foundation.
Frequently Asked Questions (FAQ)
Question: What’s the difference between social investment and a grant?
Answer: Grants are non-repayable funds. Social investment must be paid back, usually with interest, but it can unlock funding for longer-term projects and income-generating activity.
Question: Does social investment replace grants and contracts?
Answer: No. It’s one part of a wider funding mix and works alongside grants and contracts where appropriate.
Question: Are there risks with social investment?
Answer: Yes. Repayable finance means you need reliable income and clear planning. You still must meet repayment obligations, even if income falls short.
Question: Can any organisation use social investment?
Answer: Not always. It’s most suitable where there’s a clear plan for investment, stable future income, and organisation confidence in managing repayable finance.
Question: What does “investment readiness” mean?
Answer: Being investment ready means an organisation is able to consider repayable finance responsibly. It does not necessarily mean social investment is right for you, only that you have the governance, financial planning and understanding of risk needed to make an informed decision.
Question: Does being investment ready mean we should take on social investment?
Answer: No, not necessarily. Many organisations explore investment readiness and decide that social investment isn’t appropriate for them. The process can still be useful for strengthening organisation and financial planning.
Question: What is the difference between social impact investment vs social investment?
Answer: The terms social impact investment and social investment are often used interchangeably. Both terms refer to investment into organisations tackling social issues, generating positive social impact alongside financial returns.
Question: Do organisations need to own assets to take on social investment?
Answer: No. Organisations do not need to own assets to take on social investment. In fact, social investment can help eligible organisations acquire assets if this supports their mission and growth.
Question: Can Homeless Link help?
Answer: Yes. Homeless Link can signpost to specialist support and resources to help you assess options before committing and support you to explore whether social investment is the right option.
Other resources
Glossary Glossary | Better Society Capital
Good Finance The Ultimate Guide to Social Investment | Good Finance
Useful Investment terminology investment-terminology.pdf or Jargon buster | Good Finance
Passport to Investment | Crowdfunder.co.uk
Plunkett’s guide “Funding a Community Business with Community Shares” for more information about how a Community Share offer works.