Responding to Covid-19
The global pandemic is the greatest challenge we’ve faced in generations. It threatened, and continues to threaten, the financial stability of social enterprises, charities and social purpose organisations.
- 49 Number of social enterprises and charities receiving loans from the Resilience and Recovery Loan Fund
- £16m Value of loans from the Resilience and Recovery Loan Fund
- 293 Number of investments made by fund managers in our portfolio in the first three months of the first lockdown
Knowing the need was much greater than the capital we had available, we worked with government and other partners to ensure broad support packages were available to organisations we support. Our response was three-fold:
We understood the crucial importance of transparency in a crisis and shared information across the sector, creating resource hubs on both the Good Finance and our own website, to help organisations find the most comprehensive range of options for adapting their work. These hubs received significant traffic with 40,258 and 4,808 page views respectively up until 31 December 2020. This reflected the importance of the information on these pages, particularly in the early weeks of lockdown.
Adapting existing investments
We adjusted our existing funding across our portfolio, giving organisations extra cashflow flexibility where they needed it. We targeted capital and interest rate holidays as the quickest way to give cashflow relief to organisations affected by the crisis. In all, we granted these to more than 500 organisations across our portfolios. While this is over one-third of our portfolio by number, it is around 10% by value of our investments, as in general smaller organisations were disproportionately affected.
Delivering new investments
We created a new investment programme for during the crisis and beyond, working with a range of social investors, and the Department for Digital, Culture, Media & Sport (DCMS) which accelerated the release of £45 million from previously committed dormant accounts.
The £25 million Resilience and Recovery Loan Fund, managed by Social Investment Business, made Coronavirus Business Interruption Loan Scheme (CBILS) loans available to 49 charities and social enterprises totalling more than £16 million. They are interest-free for the first year. Our Community Investment Enterprise Facility (CIEF) made 155 loans to small businesses and social enterprises – totalling £10.6 million – in the weeks before the Bounce Back Loans Scheme was introduced.
Also, fund managers in our portfolio made 294 new investments totalling £102 million in the three months following the first lockdown – significantly increasing their activity during a challenging operational and risk environment.
There are many areas where we’re still working with partners to consider the role social impact investment could play. For instance, three fund managers in our portfolio are to help some of the 30,000 rough sleepers who were housed in hotels as part of the Government’s support package. We committed £30 million to top up existing funds in 2020 and expect more investments in 2021.