Social Finance

Social Finance

05 May 2016

One of the Trust’s key themes of work is Social Finance. We’re leading the way in Northern Ireland but this work is much more developed in the rest of the UK. Here we profile Social Finance, an organisation set up in 2007 to help the Voluntary, Community and Social Enterprise sector think more about finance and investment.

Social Finance is a not for profit organisation that partners with the government, the social sector and the financial community to find better ways of tackling social problems in the UK and beyond.

Social Finance was set up in 2007 to understand the funding shortfall faced by the social sector.

They brought together a team of individuals from the social sector, finance and government to delve into the challenges and opportunities for voluntary and community organisations in providing services for the disadvantaged and vulnerable.

They soon realised that there were deeper issues at hand than simply the availability of capital for voluntary and community organisations.

Those who pay for social services are not the people who use them. This creates a tension for service providers between the interests of their funders and their users. The funding of services may undermine their effectiveness. Alongside short-termism and bureaucracy in the system, this makes for a fairly dysfunctional marketplace.

With this insight, they began designing a number of financial and advisory services and products for social sector organisations looking for structures that would offer flexibility and long-term funding, and would encourage innovation to deliver maximum impact.

Over the past nine years Social Finance has mobilised over £100million of social investment from impact investors – many of whom were investing in this way for the first time. Over this period, they pioneered the Social Investment Bank, Social Impact Bonds, Development Impact Bonds, the application of Jam Jar Accounts, and the Care and Wellbeing Fund.

Their on the ground support includes work with 2,000 short sentence offenders released from Peterborough Prison, 380 children on the edge of care in Essex, 2,500 young people at risk of becoming NEET and 1,400 rough sleepers in London.

They’re also also alleviating fuel poverty for over 4,000 families in Sunderland, enabling 15,000 families to access nursery places and free children’s services, and providing 7,500 affordable micro loans in Wales.

In order to structure a better functioning social economy, Social Finance brings a mix of rigorous analysis, an ability to consider the social and financial aspects of a problem together, knowledge of running transactions and raising capital, and a willingness to engage in managing and supporting implementation into the equation.

You can find out more about Social Finance on their website.

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