A group of leading social impact investors has today announced that it is seeking a partner that can conduct research to identify the barriers investors face to deploying catalytic capital: long-term, affordable and flexible repayable finance that can support social purpose organisations including social enterprises and charities. The research should identify the blockers UK investors face when accessing this form of investment, with the aim of making it more accessible to them.
The research project is being hosted by the Social Impact Investors Group (SIIG) which – a membership body convened by the Association of Charitable Foundations (ACF) to support foundations interested in social impact investing. It will be funded by the Access - The Foundation for Social Investment and Big Society Capital. The group is looking to partner with any individual, research organisation or consultancy that can demonstrate experience in social investment and has worked on topics relating to catalytic capital. They have invited all prospective applicants to fill out a tender brief by 5pm on 13 October – which covers the various topics that they would like covered across six categories such as the role of catalytic capital to date and the barriers to unlocking more of this investment pool.
The chosen researcher should produce a piece of market analysis gathered over a three-month period which collects the opinions of various social impact investment sector stakeholders in identifying common barriers to accessing catalytic capital for a variety of investor groups; including trusts and foundations, corporate foundations, high-net worth individuals, family offices, and the UK Government. They should also include the experiences of social enterprises and charities in accessing this form of finance and provide forward recommendations to support the growth of this market that can be used in future phases of this work in 2022.
To date catalytic capital has been used to provide investment to social enterprises, social impact funds and charities to test new business models and investment structures that have a limited track record. Thanks to the fact that this type of investment is willing to receive lower or unproven risk adjusted returns and can take on more risk, it has been used to seed numerous high impact ideas across the sector. An example of this is the way in which catalytic capital supported the launch of social impact venture fund Fair by Design, which aims to support ventures that provide services and solutions to people living on lower incomes. Initial catalytic capital investors in this example were able to take more of a risk in investing into the fund at a far earlier stage when it had a limited track record.
The research will be the first step in a multi-phased project (initially hosted by the SIIG) that aims to build a broad movement on the topic of catalytic capital, and work with a range of partners and networks to develop solutions for unlocking more catalytic capital in the UK. It will be monitored by a steering group of experts in the social impact investment market including social entrepreneurs such as Homes for Good Director, Susan Aktemel and Social Entrepreneur and founder of the Social Innovation Partnership, Stephen Bediako OBE.
Gemma Rocyn-Jones, Head of Financial Resilience at The National Lottery Community Fund and member of the catalytic capital steering group, said: “Over the last ten years the National Lottery Community Fund has been using grant funding to catalyse social investment and this has resulted in a rich body of learning and new funding approaches we see today, such as match trading and the small-scale lending offered through the Growth Fund.
“This study is an opportunity to understand in-depth the role that catalytic capital plays within the funding toolkit and explore its potential to support innovation, address complex social issues and support people and communities to prosper and thrive.”
SIIG is looking for a researcher or research organisation to produce a piece of market analysis over a three-month period exploring the various questions that are contained within the tender brief.
For more information and the full invitation to tender please see here. The deadline to submit an Expression of Interest is 5pm, 13 October 2021.
Notes to Editors
About Access Foundation
Access Foundation (Access) is the Foundation for Social Investment that works to make charities and social enterprises in England more financially resilient and self-reliant, so that they can sustain or increase their impact. They do this through supporting the development of enterprise activity to grow and diversify income, and improving access to the social investment which can help stimulate that enterprise activity.
Social Impact Investors Group (SIIG) - exists to support foundations interested in starting or currently undertaking social impact investing. Membership is open to foundations and to organisations with a charitable or social mission with investible assets.
About Big Society Capital
Big Society Capital exists to improve the lives of people in the UK through social impact investing. We unite ideas, expertise and capital to create investment solutions for the UK's social challenges, supporting organisations that deliver both positive social impact and sustainable financial returns. So far, we have helped channel £2.2 billion* into investments tackling a wide range of problems such as housing and access to affordable financial products and services, to health and wellbeing, and community resilience.
To widen access to social impact investing, we have partnered with Schroders, a global asset and wealth manager, to launch the listed Schroder BSC Social Impact Trust plc. As the portfolio manager, we provide investors with high impact investments that contribute to solutions to social challenges alongside targeting long-term capital growth and income.
*As at 31 December 2020
About Social Impact Investors Group
The Social Impact Investors Group (SIIG) has been operating informally since 2011 and been convened since April 2018 by the Association of Charitable Foundations (ACF), the membership body for UK foundations and grant-making charities. ACF’s 400 members collectively hold assets of around £50bn and give over £2.5bn annually. The SIIG has an active volunteer Steering Group, including representatives from Esmée Fairbairn Foundation, City Bridge Trust, Big Society Capital, Bank Workers Charity, Joseph Rowntree Foundation, Barrow Cadbury Trust, The Clothworkers’ Foundation, Treebeard Trust and Trust for London.