A new fund on the block for 2014, supported by Centrica through their Ignite Social Enterprise, the money available is to support entrepreneurs in the energy sector.
Do you have a sustainable energy idea, the delivery of which can change and sustain communities? Whether you just have an idea, or are already seeking capital investment for your product or service, the Ignite fund is worth a look.
Centrica are providing funding of £10 million over the next ten years. The fund is seeking to make investments of between £50,000 and £2 million.
Your project must have clearly identifiable social aims, with clear outputs and goals and be energy sector facing. Your engagement with the Ignite fund may be as equity or as debt.
Ignite…driving innovation at every point of the energy chain – from sourcing and generation through to supply, service and saving energy. And by investing in social enterprises we’re making a positive impact on employment, income, housing and local communities.
The Social Investment Business have indicated they may be getting ready to launch funds that serve social businesses outside the charity and traditional social enterprise sector.
Jonathan Jenkins of the The Social Investment Business, the UK’s largest social business lender, indicated at a recent speech, at a Somerset House Big Society Network event, stated that his organisation was looking at securing funding for businesses that have with-profit profiles, that could benefit from finance streams that are different from SIB’s core government funds.
This is an interesting development in the sector, with a major player in social finance now looking to support a wider category of socially minded businesses that value their social bottom line, as well as generate shareholder value.
In a sophisticated social business support landscape, this is a timely indication that the sector is moving towards a wider recognition of enterprises with ‘community sensibility’, but who can still perform and deliver within a more traditional business matrix.
To endorse this view Big Society Capital, at the same Somerset House event, opined that perhaps eight new funds of substance, based on these wider application criteria, might appear in the marketplace in 2014.
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?
Ethical business with a social dimension…
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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…)
Ethical business with a social dimension…
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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.
Ethical business with a social dimension…
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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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The Treasury recently announced an increase in the budget allocation for the Coastal Communities Fund. Next year’s fund will be worth £29 million, an increase of 5% on the 2013 level. Government has committed the Fund allocation to 2016.
The Fund was established with the intent…
to invest in seaside towns and villages, helping them achieve their economic potential, reduce unemployment and create new opportunities for young people in their local area.
Forecasts for the first round projects across the UK are that the Fund will generate 5,000 jobs and 500 apprenticeships. You can see a map pinpointing the successful first round projects here.
Retail businesses in the Eastern region can share in a £250,000 fund to help improve their digital technology thanks to the Greater Lincolnshire Local Enterprise Partnership and Lincolnshire County Council. (£200,000 of the money has come from the Department for Communities and Local Government, via the Big Lottery Fund, operating as the BIG Fund. Lincolnshire County Council is contributing a further £50,000).
The Council and the LEP are developing pilot areas in which businesses can bid for the funds. Once the pilot areas are identified, businesses in those areas will be able to bid for a share of the money from April 2013 until the end of March 2015.
In the wider Coastal Communities Fund context the successful bids for round 2 will be announced in the autumn and nominations for round 3 are expected to open in early 2014.
Finally, Lincolnshire does have Digital Business Cluster presence on LinkedIn. Although specific funding is targeted at distinct areas of the County, joining a LinkedIn group is a good way to keep up to date with developments across the county. Read more here…
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Sometimes looking over the wall at what your neighbours are doing to the landscape of their garden can give you ideas for your own. In this short article we have looked across the Atlantic Ocean to see how, in the last couple of years, the Canadian Social Finance sector has responded to community and governmental demand for increased active social investment from the private sector.
Encouraging social investment: Canada
Towards the end of 2010 the Canadian Task Force on Social Finance issued a major report – Mobilising Private Capital for Public Good. The Premier of Ontario, Dalton McGuinty, defined the work as being to ‘…help social enterprise and social purpose business adopt social innovation business models; and develop recommendations to enhance public and private sector support for social finance to unleash its full potential in Ontario‘.
The report offered seven recommendations to the burgeoning Canadian sector…
1. The public and private foundations should aim to invest at least 10% of their capital in ‘mission-related’ investments by 2020. They should report annually on their progress.
2. The country should establish an Impact Investment Fund, supporting existing activity and encouraging increases in scale and new fund creation for the sector. Regions with no fund should be encouraged to create one.
3. New bonds and legislative change should occur, to foster and incentive flows of private capital tot he social finance sector.
4. Pension funds should deploy their assets into social investment, with government ensuring that the pension funds are mandated to do so, and to offer pension Funds incentives to balance and mitigate any additional risk.
5. Policy and regulation should change to support social revenue generating activities in the charity and not for profit sectors.
6.Tax incentives for social investing should be exploited, encouraging capital to be channeled to social enterprises offering maximum social and environmental impact with their activities.
7. Business development programmes, training and business support initiatives from central government should be tailored to specifically engage with social businesses and not just ‘mainstream’ SME organisations.
Whilst it can be argued, looking at the Canadian shopping list, much work of a similar nature has been started in the UK. However, the push towards incentivising pension funds, delivering mainstream flexed business support directly to the social sector and the adoption of a very broad and generous tax incentive led attitude to social impact investing would add new dimensions of transformation to the UK sector.
The report, Mobilising Private Capital for Public Good, develops the recommendations above and offers examples and capital forecasts for their deployment. Interestingly, the outputs recommended were assessed in a follow-up report one year after publication.
After a year – what happened? Canada
This action and output summary, Measuring Progress During Year One, shows that some 50 million Canadian Dollars (CnD) of new mission investment had been generated by the private sector. New government and private fund partnerships had created 284 million CnD of additional impact related investment, with some 215 billion CnD of assets under management by pension funds who are now signatories to the UN backed Principles for Responsible Investment.
The follow up report highlights some achievements and illustrates how the Canadian debate is starting to have a transformational effect of the country’s social impact investment landscape. In the final analysis there is still huge opportunity in this dynamic economy to take the social investment message forward.
In concluding the report illustrates a late 2011 survey on SME take up of government backed services for the SME sector. Only 5% of the SME survey clearly identified themselves as having social outcome considerations. 93% of the survey cohort expressed ‘ambiguity and confusion’ over social investment issues. With 2% of the government services used by those surveyed explicitly excluding non-profits and the social sector.
Canada has a long and successful history of not for profit and social impact development. These reports show that even with history, public opinion and buckets of radical thinking there is still much to be done.
