Responding to COVID-19
The global pandemic is the greatest challenge we’ve faced in generations. The impact is being felt across the world, as people fear for the health and economic wellbeing of their loved ones and themselves. It leaves social enterprises, charities and social purpose organisations facing an unprecedented challenge.
- 294 Number of investments made into social enterprises and charities in the first three months of lockdown – Data from Big Society Capital
- £102m Amount of investments made into social enterprises and charities in the first three months of lockdown
- 500+ Number of organisations granted interest and capital interest holidays during the crisis
- 96000+ Number of unique visitors to COVID-19 information hubs on Good Finance and Big Society Capital websites up until 31 October 2020
The global pandemic not only put people’s health at risk. It threatened, and still threatens, the financial sustainability of many social enterprises, charities and social purpose organisations, at a time when the services they provide are more needed than ever. In this rapidly changing situation, we committed to doing our best to support the sector, and acting quickly to help. We understood that the scale of need was much greater than the capital we have available, so we worked with government and other partners to ensure broader support packages were available to the organisations we support.
In line with our principles, our response to the pandemic was partner-led. Firstly, 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. Secondly, we adjusted our existing funding across our portfolio, giving organisations extra cashflow flexibility where they needed it. And thirdly, we created a new £100 million 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. A part of this programme utilised the governments CBILS loan guarantee scheme to enable a number of our partner fund managers to provide loans and investment to affected social enterprises, charities and social purpose organisations.
We worked with the Social Investment Business and other social investors to establish the £25m Resilience and Recovery Loan Fund – that made Coronavirus Business Interruption Loan Scheme (CBILS) loans available to charities and social enterprises – these are interest-free for the first year. This facility was established from scratch in a record four weeks by significant partnership work across the social impact investment sector.
Impact and learning
We understand our impact in several ways.
The Good Finance and Big Society Capital information and resource hubs received significant traffic with 130,000+ and 4,461 page views respectively, from a total of 96,000+ unique users up until 31 October 2020, reflecting the importance of the information on these pages, particularly in the early weeks of lockdown.
Adapting existing investments
When we adapted our existing funding, 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 a third of our portfolio by number, it accounts for just 10% of our investments by value, highlighting how smaller organisations are disproportionately affected by the crisis.
Delivering new investment
In the three months following lockdown managers in our portfolio made 294 new investments for £102 million. We believe this was a significant achievement from fund managers in a completely changed risk environment, with limited future visibility, all while adjusting to diligencing and executing investments remotely.
Our Community Investment Enterprise Facility (CIEF) made 155 loans to small businesses and social enterprises – totalling £10.6 million – in the weeks before bounce back loans were introduced. The Resilience and Recovery Loan Fund meanwhile approved funding worth more than £15 million to 40 social enterprises and charities so far.
Due to the pandemic’s scale, there are many areas where we’re working with partners to consider the role social impact investment could play. For example, 15,000 rough sleepers were housed in hotels as part of a Government support package. Three fund managers in our portfolio are now looking at options to buy up to 200 properties, working with charities and social enterprises providing wraparound support that helps people find a home and turn their lives around. We committed £30 million to top up existing funds in 2020, with more investments expected in 2021.