Social Impact Investment set to accelerate
As more and more investors look for social impact as well as a market return, the discovery that both objectives are possible at the same time is making the sector so much more attractive that it has been predicted that the current $250 billion currently invested globally will grow to $1 trillion by 2020.
Resonance has been committed to social impact investment since 2002 and is hugely encouraged by the report of an Advisory group to the Department for Digital, Culture, Media and Sport (DCMS) called ‘Growing a Culture of Social Impact Investing in the UK’, which suggests that the social impact investment market is moving towards the mainstream.
The Resonance model involves both raising capital for social enterprises around the UK and designing and managing Social Impact Investment Funds, which invest across the UK, across 3 main themes;
(i) Community Asset Funds, which are empowering local communities to deliver the asset projects they need to flourish, (ii) Property Funds, which are scaling social enterprise through access to property (with a current focus on Homelessness) and (iii) Enterprise Growth Funds, which are scaling social enterprise through access to affordable growth capital (which also takes advantage of Social Investment Tax Relief, a key market driver reference in the report).
The report has focused on our social impact Property Funds which have c £140m invested in a portfolio of over 600 homes across the UK for the use of those who are at risk of homelessness but are ready for independent living. Over a thousand people have already been housed and supported by our partner organisation Real Lettings, a social lettings agency run by the homelessness charity St Mungo’s, to maintain their tenancies and move towards employment, stability and independence. Investors in the Funds receive both a financial return plus tangible and measurable positive outcomes for people and these Funds are especially attractive for local authorities who currently form part of the investor base.
Marvin Rees, the Mayor of Bristol, whose city council have made a second investment of £5m sees this as extending a Fund which has already made an important contribution to the supply of affordable rented housing in Bristol. “With this investment in the National Homelessness Property Fund we are reducing homelessness, giving people better quality housing solutions and providing better opportunities for people across the city. It also means that the council will save money in the long run by relying less on expensive emergency temporary accommodation.”
Vanessa and her three-year-old daughter left her mother’s home as it was overcrowded and the cramped living conditions meant that relations became very strained. Now in her own Real Lettings flat she’s studying for a degree in business and training towards a qualification in hairdressing. Relations with her mother have improved and Vanessa says her new home has “definitely opened up doors and given me and my daughter a better future”
With all tenancies being sustained for at least six months, very high numbers reporting being up to date with payments and the great majority in work or moving towards employment, there are many successes to report. The Funds are making a significant contribution to combatting the problems of homelessness and tackling the need for more affordable rented accommodation, enabling council taxpayers’ money to be used wisely instead of on expensive temporary accommodation. Perhaps most importantly it gives families who are at risk of homelessness, dignity, self-confidence and a new start and helps them away from ‘the revolving door’.
With Resonance’s experience in social impact investment we’re delighted that the Advisory Group’s report to the DCMS now sees this as becoming mainstream, exploding the myth that social impact and a financial return on investment are incompatible. We look forward to both continuing to scale social enterprises and designing and building Social Impact Funds to address real social issues that people care about.
Join us in scaling up social enterprises in the UK through social impact investment.