An investment fund that supports social enterprises with their growth ambitions has had a “significant and positive” impact on the sector and businesses involved, according to a new report.
The Investment and Contract Readiness Fund (ICRF) aims to ensure that social ventures are better equipped to secure new forms of investment and compete for public service contracts.
A three-year £10m fund, it is managed by the Social Investment Business on behalf of the Office for Civil Society. Social enterprises can apply for grants of £50,000-150,000 to purchase support if they are looking to raise at least £500,000 in investment or win a £1m contract.
The fund – the first of its kind globally – was created in response to a growing sector that the organisation said was being held back because it lacked the skills needed in this area.
Since May 2012, 94 social ventures with “high potential for growth” have received grants worth £8.9m to purchase specialist support. A report looking at the fund says the first eight ventures to receive support demonstrate the “significant and positive impact” the fund has had.
These eight enterprises collectively received grants worth £815,144, which has since helped them win deals worth £34.9m. For example, after receiving a grant of £52,250 Pure Innovations won a five-year contract worth £11.7m from the royal borough of Kingston to take over the running of its learning disability service.
Doug Cresswell, CEO of Pure Innovations, said the grant had made a “very tangible and positive difference”. He added that the process meant that his social enterprise had reviewed its business strategy to focus on winning more contracts in the future.
Jonathan Jenkins, CEO of the Social Investment Business, said, “These success stories show how modest levels of targeted business support can make ambitious charities and social enterprises much more successful at raising the investment they need to expand their activities and winning contracts to provide public services.”
The report notes that as the social enterprise sector continues to grow and adapt to meet social needs, the fund will also need to evolve with it. ‘Market shapers’ such as Big Society Capital, the Big Lottery Fund and the Cabinet Office were identified as being well placed to steer the evolution by continuing to lead the conversation about what kind of social investment market should be built.
The report concludes, “The innovate design of the fund itself will no doubt become a benchmark for similar funds elsewhere in the world.”
The Social Investment Business is also exploring alternative ways to raise money for social investment and the ICRF. In February, it announced a strategic partnership with social investment fund manager Social and Sustainable Capital.
The partnership aims to attract “substantial amounts of finance” from the private sector and is targeting investors that want both a financial and social return on their money.
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