LONDON (Thomson Reuters Foundation) - British social ventures have won investments and contracts worth almost £35 million thanks to an innovative government fund aimed at helping them to get the skills needed to raise money and compete for public contracts.
The £10 million Investment and Contract Readiness Fund (ICRF) helps charities and social enterprises to buy specialist support such as legal advice, financial management and public service commissioning.
Social ventures are booming in the UK, with 2 million people employed by social enterprises contributing £55 billion to the economy per year, studies show. But many lack expertise to successfully raise investment or win public service contracts.
Eight organisations supported by the ICRF have already raised investment or won contracts worth almost £35 million since it was set up in May 2012, Social Investment Business (SIB), which manages the fund, said in a statement.
"We want to build on the success of the ICRF and use business support grants to help charities and social enterprises win the funding they need to deliver bigger and better services tailored to the needs of their communities, create more jobs and boost their local economies," said SIB Chief Executive Jonathan Jenkins.
In one deal, Empower Community Management, raised more than £10 million in investment, which will allow it to provide free daytime solar energy to social housing tenants in more than 2,300 homes in Sunderland, northern England.
An interim review of the fund published this month by Boston Consulting Group found evidence that it had made "significant and positive impact". Social ventures reported significant increases in their skills and knowledge as a result of the help they had received, and 70 percent thought they would need less external support in the future.
GROWING SECTOR
Social investment is growing strongly, with total demand in the UK forecast to reach around £1 billion in 2015/16, according to Boston Consulting Group.
Britain, internationally recognised as a leader in social finance, has implemented policies that encourage social enterprises to compete for public service contracts. Some 28 percent of social enterprises worked for the public sector in 2011/12, according to the government.
Nick Hurd, minister for civil society, said the positive knock-on effects from the ICRF had been impressive. Out of those organisations that had already closed deals, for every £1 spent by the government, £43 had been raised through additional investment or contracts.
"Social enterprise is a very vibrant sector of our economy…but traditionally it has struggled to access finance," Hurd told Thomson Reuters Foundation. "Social ventures need our backing to grow and compete for public service contracts and that is what the fund is for.
"And it has helped to increase understanding among social investors and social organisations," Hurd added. The fund had also supported the growth of social investment finance intermediaries, one of the "backbones" of the market.
Doug Cresswell, chief executive of Pure Group, said his company had had a poor record of winning tenders in the past. Thanks to a grant from the ICRF it won a contract to run the London borough of Kingston's learning disability service and helped it to significantly increase its turnover.
"The ICRF has made a very tangible and positive different," Cresswell said. "It enabled us to undertake a focussed review of our growth plans and, crucially, to secure high-quality tendering and bid-winning support."
The fund is open to applications from social ventures based in England that are looking to raise at least £500,000 in investment or win a £1 million pound contract. They can apply for grants of £50,000 to £150,000 pounds.
SIB said 94 social ventures have received grants worth £8.9 million from the fund, which runs for three years.
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