‘Power to Change is a new initiative which will invest up to £150 million to support the development of sustainable community-led enterprises across England. It will be delivered by an independent Trust established next year’…The Big Lottery
A new Trust will be formed to deliver the Power to Change programme, which should become active in the Autumn of 2014.
This new fund represents a refreshed recognition that it is community enterprise which can play a key role in the regeneration of localities.
Whether you and your community are looking to develop pop-up shops, reclaim that closed library or to re-energise a community centre this new fund could be for you.
The new fund is an injection into the community business sector, much to be welcomed. As always, Oh that the pot was even bigger!
Vince Cable recently announced a variety of additional support mechanisms for small business – new funding for loans and additional mentoring and support services.
There is a new website – Business is Great Britain – which aims to provide information and resources to UK businesses to plan, export, lead and nurture their development.
The web pages also contain useful links to funding sources, business grants etc., to help that growth.
The new British Business Bank has allocated its first £45 million pound tranche of funds, the deployment of which should begin in early 2014. The money is being placed with finance intermediaries to explicitly be invested in the support of SME’s.
In the ministerial announcement was an indication that the funds may be invested in ‘…businesses that offer non-traditional channels of lending that may not be regulated by the Financial Services Authority or the Office of Fair Trading’. Is this an oblique reference to the Social Business market?
The Sector Mentoring Challenge Fund aims to encourage employers, trade bodies and others to work together and deliver tailored mentoring solutions that address real business needs in their sector.
This is a one off funding tranche, competitively aspiring to fund innovative mentoring and support for business sectors. The Fund is specifically looking for proposals that can become self funding examples of sector support.
Any help for the SME sector is useful in the current economic climate, although the acid test will be how conservative in approach these new intermediary funds turn out to be. More support, or more of the same, only time will tell?
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Put simply money illusion is the propensity to respond to changes in money magnitudes as if you were were responding to changes in real magnitudes.
For example, if we increased your income by 100% from now, but also increased the cost of all the goods and services you used or purchased by 100%, and you were already buying the optimum goods or services for your needs, then you could go on acquiring these at previous rates of consumption. (Any goods or services that you previously couldn’t buy, you still could not afford).
However, the money illusion, in essence, is when your income rises and you ‘feel’ richer, consequently you purchase more luxury or non-standard goods or services because of that feeling and purchase less of the staples you previously bought.
Individuals fail to grasp that their real income has not risen. (Your real income is measured by dividing your money income by an appropriate and consistent index of prices…see below…).
You can see therefore in mainstream economic practice that the banks ability to quite literally print money, to increase it’s own money magnitude at will – remote from real lives and economic behaviour, or for an individual to regularly value and revalue their property portfolio on a rising market, can lead to financial disaster for the individual.
The economist Irving Fisher deliberated long and hard about the high value of stocks immediately before the 1929 Wall Street crash, ands produced many of the indices of value that we still use to measure, or second guess, market ‘fluctuations’ today. This thinking has not prevented economic juddering in recent decades either.
We would wish to argue that a rational social economy, based on business outputs that are focused on social outcome, not individual wealth or shareholder value as a predominant driver, are one way to counterbalance the money illusion.
Taking out the thirst for dis-proportionate personal wealth and dedicate outputs to a wider social good – replacing the feeling of ‘riches’ for the feeling of ‘community’ – is a perfect way to achieve a new economic equilibrium.
Boost the social business market, starve the illusion!
Explanations is an occasional Mining the SEEM piece to explain economic and financial thinking in a clear and understandable way. If you have a term to be explained, or even to tell us when we haven’t been clear, then contact the Editor at Mining the SEEM and let us know.
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Nottingham Trent University Business School will be coming to a complete halt shortly. No, not a disastrous service failure, but the arrival of Thinkubator Challenge 2013.
This is a whole day in which the academic staff and students are divided into ‘hubs’, and will work together to devise solutions and suggest strategic choices for the challenges that they have been submitted.
“With access to the full resources of Nottingham Business School, each hub will focus on one individual challenge at a time. Organisations submitting challenges will receive a short response, electronically, on the day, which will outline the hub’s thinking, recommendations and advice on practical steps to take”.
It will take place at the Business School on November 27th 2013. You can read more about the Thinkubator Challenge 2013 here,
(Ed: What a fantastic idea! How about a one day event in partnership with the Social Finance sector to explore options and support the social business sector in 2014?).
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The concept behind this new body is to be a focus for the smaller social enterprise, to help them review, explore and contribute to the social investment agenda.
The Research Council has two immediate projects; looking for new sources of capital for the UK social investment market and looking at the technicalities of improving the ‘pricing structure’ of the social investment market for existing participants.
New Sources of Capital
This research will run from November 2013 to March 2014. The deadline for submitting a tender for this project is Thursday 14th November. For the purposes of this research, the City of London Corporation will be the coordinator on behalf of the Council.
The terms of reference for this research can be accessed via the London Tenders Portal: www.londontenders.org
Improving infrastructure to price social investment
This research will run from November 2013 to May 2014. The deadline for submitting a tender for this project is Thursday 14th November.
In the next six months the Research Council will be calling for ideas from researchers and other key organisations in the sector to fuel a fuller research programme.
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Academic underpinning of development – Nottingham has two universities…
We featured the early results for GDP from the Office of National Statistics for Quarter 2 in 2013 recently. These are now firm and the results are detailed below. The slight air of optimism about UK Ltd continues to be felt, we would argue.
UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.7% between Q1 2013 and Q2 2013, unrevised from the Second Estimate of GDP published 23 August 2013. Between Q4 2012 and Q1 2013, GDP in volume terms increased by 0.4%, revised up from the previously estimated 0.3% increase.
We were also delighted to read a recent article in the national press, where Nottingham, our home city, was cited by the Governor of the Bank of England as a ‘bell-weather’ for the UK economy. With data showing that nine out of ten jobs in the city are currently in the service sector, a move back to ‘creative manufacturing’, in all it’s diversity, is a great echo to the high Victorian energy of the city.
Katie Allen, writing in The Guardian, described Mark Carney’s view of Nottingham as a city where growth was rising, but that the quality of that growth and innovation was also significant. Gone are bicycles and cigarettes, but they are replaced by significant entities in bio-science, engineering and the arts/creative sector.
Examples in our city include the creation of new Creative Quarter Community Interest Company, as well as the delivery of a new BioCity development to foster the city’s lead in the sciences.
With the development of the Creative Quarter, it is great to see social business as a key plank in the city’s developing enterprise structure.
If, as a social business looking to make an inward investment, or to explore the context of Nottingham a start-up or social business development setting – you can find the city’s Growth Plan online here.
The team at SEEM, with our expertise in social business start-up and skills in delivering social finance would be happy to help you shape your project too. Contact us here…
Interesting web resources:
Mapping the Moment – a map based examination of the ‘cultural industries’ in Nottingham between 1857 – 1867
Knitting Together – an examination of the East Midlands knitting industry, 1600 to 1970. (Much changes in the economic landscape for our city and its hinterland, but much remains the same. New technologies, mergers, enterprise rise and fall…)
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Social Business – the larger market for social finance and social impact
Next month I’ll be making my annual homage south to the ‘Good Deals’ conference in London to immerse myself in all things ‘Social Finance’ (www.good-dealsuk.com ) No doubt there will be a host of new investment vehicles to discover, angel investors to meet and a plethora of organisations looking for exciting investible propositions.
And when I arrive in the throbbing metropolis that is the epicentre for this rapidly developing industry, I’ll be asking one question; ‘When are you going to deal with the elephant in the room and redefine the market for social finance?
The brave new world of Social Finance shouldn’t be confined to expanding social enterprises or transforming charities; the market it simply isn’t big enough. It has to be about a much broader Social Business marketplace defined by an organisations’ ability to make a difference in society and not their legal persuasion.
Organisations and individuals looking to ‘Invest for Impact’ in the Social Business marketplace need to understand that there’s much to be done in terms of helping to shape, develop and widen access to social finance. We need better routes to market through Universities, LEPS and players such as the Chambers and the Federation of Small Businesses. We need well developed brokerage facilities, better physical access arrangements and much wider appreciation that at time when banks are loathe to part with their money, social finance can be conduit to growth, jobs and social impact.
Some would argue that it’s’ easier to socialise the private sector than it is to commercialise the third sector.
Whether you believe that or not, the two markets are not mutually exclusive and social finance needs to expand its horizons and seize the moment. Seldom can there have been a better time to provide finance to businesses that are willing to embed social and/or environmental impact in their operations. We simply need to provide a much greater awareness of the opportunity and the means to help investees articulate the difference they can make in people’s lives.
Celebrating the Good Deals Conference
To celebrate the Good Deals Conference, SEEM are offering a FREE tailored support opportunity for any organisation or individual that is intent on delivering social and/or environmental impact and want to access Social Finance to gear up their operations. To understand more about social finance and how to access it call 0115 900 3299 before 31st October.
Roger H. Moors
Roger Moors is CEO of SEEM (Supporting Social Business) based in Nottingham. With a background in banking, Roger and SEEM broker social finance across the East Midlands and currently hold contracts with a number of intermediaries and funders including the Key Fund and Social Incubator North.
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The internet is now a prime driver for economic growth and is continuing to shape how enterprises reach out to partners, funders and their customer/client base. Access to it makes it the conditioning and mediating framework for a discourse about enterprise, from the smallest community business to the very largest corporation.
A recent 2012 study by the Boston Consulting Group – The Internet Economy in the G-20, the $4.2 Trillion Growth Opportunity declared that…
The (internet) contribution to GDP will rise 5.7% in the EU and 5.3% in the G-20. Growth rates will be more that twice as fast – an average annual rate of 18% – in developing markets, some of which are banking on a digital future with big investment in in broadband infrastructure. Overall, the internet economy of the G-20 will nearly double between 2010 and 2016, when it will employ 32 million more people than it does today…
Enterprises – social, community or corporate in governance – ignore web connectivity at their peril. Alongside this bow wave of expansion for connected business comes a shift in perception in what it is that the governance, education, data management, capital and talent needs of our communities of interest are, in order to respond to this internet fuelled growth.
This is a collaborative concept delivered from a number of key internet players in the current EU marketplace. The creators of web based services such as Spotify, Atomico, Seedcamp and Tech City UK amongst others. If the thought of thinking about uber-Geeks and technology puts you off, persist with this article because the thought leaders in their manifesto do have some challenging and innovative ideas that would, if achieved, condition your internet driven social business for decades to come.
Here at SEEM we are always interested in disruptive models of economic creation, good governance, enterprise support and delivery. There are two elements of the manifesto which strike a chime with us and we’ll comment on them below.
Education and Skills:
The manifesto highlights a European Commission study that found across 27 EU countries some 20% of secondary level learners had never or rarely used a computer in their studies. The EU was also critical of teacher training in the IT arena. Our manifesto authors place stress on making teachers digitally confident and with increased competence to rise to the challenge of a digital society.
Teach every child, they state, the principles, processes and the passion for entrepreneurial endeavour from the earliest age. (The web offers a range of free creative, analytical and publishing tools in the Open Source context, that could, for example, transform educative processes around IT if fully adopted).
The final elements of the education manifesto are key to radical economic growth and could, if adopted using the social business framework, transform our sector.
Encourage university students to start a business before they graduate, as well as preparing tertiary level students for a radically different market place. For the social business sector, this chimes well with our debates at SEEM about how to foster the concept of social business creation and support as a life aim in business schools and on IT and commerce based courses.
The authors of the manifesto argue, in a similar vein, that the very largest corporation should open up their training departments to the general public, thereby increasing the critical mass of skills in a community as a necessary condition of creating new, web driven enterprises of every governance hue.
Access to Capital:
Capital is king or queen in starting a new business whatever its philosophical approach to the community marketplace. Revision to tax breaks and increasing the ease with which companies can access finance are mainstays of this part of the manifesto.
Interestingly, the manifesto puts a focus on buying more goods and service from small business. Although not made explicit in the manifesto this is the localism and SME support arguments writ large in EU lettering. It is difficult and complex for small businesses to bid for government contracts in the UK, despite recent moves to make procurement a more open process, but encouraging local purchasing initiatives would be one way to encourage the take up of provision from smaller entities, we think.
The final innovation we recognise in the manifesto is the argument for the creation of a new business form. The E-Corp. This new cross border entity would be creatable on-line and up and running in 24 hours. (A little over optimistic we think…), but the concept holds good. Why should innovative businesses committed to social impact locally not also have the opportunity trade internationally and generate surpluses from outside their local economy to deploy in their own?
This takes the Keynesian notion of ‘leakage ‘ from an economy and reverses its polarity – their leakage can become our social value. Brilliant!
Generated by key thinkers in the EU technology sector, this manifesto none the less offers some innovative and interesting ideas about how to condition change for economic growth across the EU. Changes which are pertinent to start-ups and social innovation across the piece in the UK, whatever profile your business has. See the web site here…
The SEEM Team – thinking about social business start-ups
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Bruce Davis, Managing director of Abundance Generation, recently gave a short talk on the democratisation of finance. Davis argues that traditional sources of finance are dis-empowering, and that we should exercise our right to change and deal with alternative providers of finance that offer more control and flexibility.
(Abundance Generation is a crowd-funding tool, which allows people to invest in UK renewable energy projects – from as little as £5, using debentures as the financial mechanism of choice to secure a long-term commitment from both the project and the investor.)
See the Davis proposition explained here…
Not all viewers will agree with his position on traditional banks, but his emphatic, if slightly downbeat message, does contain some consistent and widely felt concerns.
His principle point is that we all, highlighted in a recent Mining the SEEM article, suffer from financial cognitive dissonance. Younger people, Davis argues, now understand the power of the web to link reflection on finance and action via a web connected keyboard.
We would argue the same for the emerging Social Finance market. New modes of lending and support, available from non-traditional sources, where key information, data and contact is web based.
A key difference to those publishing and marketing in the social finance sector is that there is much screen space and column inches devoted to the philosophy of the lender, always. The core values and social concerns of the proposition are the key message, always available before control issues are highlighted or the rate card is displayed.
Davis sees alternative finance as a cultural issue. Trust, emphatic support of social and ethical principles are always first for him. This is the default presentation mode for the social finance sector, we would argue.
Mainstream banks are now beginning to make changing accounts and money ‘mobility’ an easier option. Perhaps there is a paradigm shift in mainstream fiscal supply starting to emerge. What do you think?
The SEEM Team – thinking about ethical investment and renewable energy
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Social finance is about ethical investment, coupled to returns that maximise social equity and outcome, whilst providing returns, albeit of a softer maturation than traditional investment vehicles.
There is a new market-place for matching socially positive investors with enterprises who embrace the social return in parallel with the financial…the social stock exchange.
Below we offer some examples of a new breed, the market making, signposting organisation intent upon making social finance investment a reality,
They meld with the mainstream financial markets in a variety of ways, or run ‘independently’. Evidence of this early stage development is illustrated by, in the cases we review, that there appears to be no single cross border, cross discipline framework with regard to governance, recognised standard fees or standardised cash holdings to support investment. Some operate in developed markets, others in emerging and frontier zones.
A good, standardised assessment methodology for both social and environmental positive impact already exists, Read more about GIIRS, (pronounced ‘gears’), a Pennsylvania based not for profit organisation with a world view. Could a similar system be invested to measure social finance market makers too?
None the less, a clear emergence of a trade/invest market for the socially minded investor can only be a good thing, we would argue.
This not for profit company believes it should help make money do good. Based in Oxford, UK the Ethex team strive to inform and support positive investors in identifying and investing in companies with strong social outcomes as part of their delivery.
Ethex believes that all money should do good – not only financial good, but also making the world a better place. That means investments that deliver social and environmental benefits, not just financial ones. Sadly, this is not true for the majority of financial products.
Currently financed from a variety of charitable trusts, Ethex is supported by The Tudor Trust, Esmee Fairbairn Foundation, The Big Lottery Fund and others, with plans to become self sustaining as their investment portfolio grows. (Ethex are open about the charges to both investor and companies seeking investment, as well as salary levels in their organisation).
Based in the City of London, this company is located and mirrors quite closely a traditional financial market matrix, featuring London Stock Exchange listed companies with social drivers.
At the Social Stock Exchange we connect Social Impact Businesses with investors looking to generate social or environmental change as well as financial return from their investment.
We believe that robust revenue and growth businesses with social and environmental aims at the core of their activities are best equipped to generate positive change. We call these Social Impact Businesses.
As a market maker the SSE evidences strong standards, reporting and accountability processes. They argue that there selection processes for companies is rigorous and transparent, and that there system of annual Impact Reports ensures that social mission remains a constant in the companies invested in. Mission drift can lead to a lapse of listing with SSE,
Moving away from the UK into the global arena for Social Finance there a number of market making organisations in our sector who focus on Africa and Asia, not Western Europe.
This organisation is a market gateway for Africa and Asia, an access point to social enterprises seeking social market listing/capitalisation which is managed by the Stock Exchange of Mauritius (SEM).
By taking the lead in supporting Impact Exchange, SEM is working to ensure that the capital markets actively provide the infrastructure and systems necessary to create an organized, fair and regulated market that will bring Impact Issuers and Impact Investors together from across the globe. SEM is fully supportive of the vision of “”Maurice, Ile Durable” (“Mauritius, sustainable island”)”, and supports the emergence of Mauritius as sustainable island by providing a global marketplace to support sustainable investment for social and environmental impact throughout the continent, the Asia Pacific and beyond.
Impact Exchange is an open investment market, with the Impact Partners programme operating as a pre-screened, closed investment market for enterprises already exhibiting sustainability and sophistication in delivery,
The Exchange has a non – profit arm, Shujog, which provides practical operational help for social enterprises in the market’s area of interest, as well as playing a key role in developing impact assessments to evidence the social value for both the enterprise and the socially minded investor.
Impact Exchange, supported by the SE of Mauritius appears to evidence a mature and sophisticated approach to the funding, reporting and impact assessment of social enterprise on a pan-regional basis. Read more about Impact Exchange here,,,
Further evidence that mainstream financial institutions, as well as traditional trust funds, are bending more towards social finance and impact investment opportunities is evidenced in a recent Cabinet Office report on Achieving Social Impact at Scale: co-mingling social investment funds.
New fund mixtures for a new market…
This report from the Spring of 2013 offers the reader case studies of seven international projects which have taken a layered and differentiated approach to social investment, including in the UK some key Trust funds.
Foundations across the world are increasingly looking towards social investment as a tool to help them to achieve their social mission. Alongside grants, growing numbers of foundations are providing different forms of repayable finance to social enterprises and charities to enable them to tackle poverty and disadvantage, strengthen communities, create jobs and drive growth…
This co-mingling of funds, layering of risk and return at stepped levels – coupled to a new social investment and impact recognition market place – all indicate that social finance as an emerging market sector has an ever increasing means of recognising opportunities and in refracting often competing investment needs through the co-ordinating lense of social outcome.
The SEEM Team – thinking about structural change in the social finance arena
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