A bridge to social investment Essex 19 May 2017 Social Finance is authorised and regulated by the Financial Conduct Authority FCA No: 497568

Who we are 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. MOBILISED OVER £110M OF SOCIAL INVESTMENT

WHO ARE THE SOCIAL INVESTORS? Finance for socially motivated organisations is similar to the private sector, with some important differences. The types here are listed according to ascending cost of capital. Description Examples Charitable Trusts and Foundations Typically ~90% of finance as grants with the rest repayable finance Primarily for charities Driven by high social return Social Bank Commercial loans from £50k to £10M (typically £2-3M) For Social Enterprises / Charities Social Loan Funds Commercial loans to social sector organisations in 2 categories: Type A: <£250k Type B: up to £3m Social Investment Tax Relief (SITR) Tax advantaged scheme to help raise finance for social enterprises Regulated social sector organisations Social Equity and Mixed Funds Similar to Private Equity Does not require a running return Source: HMRC Website

Why and when an organisation should consider investment? Charities and social enterprises may consider taking on social investment for a variety of reasons: Why? When? Develop better performance and financial literacy Trading to deliver a surplus Taking on an asset that delivers revenues Support to attract new money Help a grantee become more sustainable / diversify revenue Taking on contracts from the public sector Enable funders to recycle their money Diversify revenue into complementary service areas

Case Study: Teens and Toddlers (Charity) SOCIAL ISSUE & INTERVENTION Social Purpose: Better the lives of disadvantaged children and adolescents vulnerable to becoming Not in Education, Employment or Training (NEET). Intervention: At-risk young person mentors a disadvantaged child in nursery - develops emotional intelligence - and improves education and employment outcomes Target Group: ~3,000 vulnerable teenagers and disadvantaged children in nursery in Greater Manchester and Thames Valley Success thus far: First project delivered 17% over-performance on outcomes compared to original base case ~97% of T&T grads in employment or training OUR WORK Project: Advised T&T on programme design, CBA, bid development; raised investment; performance management systems for service delivery Outcome: Successfully won two successive Social Impact Bond programmes run by DWP and raised £1.7m investment to fund two projects delivered over 3.5 years each

Oomph! Track record on outcomes CASE STUDY: Our Organisation Makes People Happy Award winning for profit social enterprise set up in 2011, dedicated to enhancing the mental, physical and emotional wellbeing of older adults. Offer training, support and services to allow care home staff to deliver unique, personalised exercise and activity programmes. January 2017, Care & Wellbeing Fund (managed by Social Finance) invested £0.8m Created new minibus service – Oomph! Out & About - care homes to run out of home activities. Oomph! Track record on outcomes

case study: ABILITY TEC - FIRST INVESTMENT Commercially focused social enterprise manufacturing electronics based in Bolton. Sources components globally designs and assembles electronic circuit boards to client requirements. Investment Details   Amount £260,000 (Fed 2017) Term 5 years Interest Rate 7% Type Loan stock (unsecured) Use of Funds Refinancing creditors Working capital for growth Investee Details   Name Ability Tec CIC Legal Form Community Interest Company (2012) Turnover (2015) £573,037 Employees 12 Managing Director Oliver Randell Social Impact Ability Tec mission to create lasting social benefits for employees, customers and the community. Profits reinvested in business, workforce to double over the investment term. Workforce are disabled

Case Study: Reconnections Loneliness service Reconnections Ltd Age UK H&W (Lead Delivery Body) Commissioners: Worcestershire CC, CCGs, Cabinet Office & BLF 3,000 people Investors: Nesta, Care & Wellbeing Fund & Age UK National Delivery Partners Payments dependent on reductions in loneliness Impact on loneliness measured using standard scale Local delivery partners manage support through volunteers £850k investment Worcestershire County Council have awarded a outcomes based contract for reductions in loneliness. The Care and Wellbeing Fund and Nesta Impact investments has provided upfront investment to help fund the service. This has allowed us to work with Age UK Herefordshire and Worcestershire to bring together a number of voluntary organisations across Worcestershire to create a new county wide project to tackle loneliness. Its is an opportunity to work at scale across a whole county to reduce loneliness and the impact on costs of health and social care services. PSSRU are also evaluating our impact and the economic and social affects of the service.

Innovative investment partnership

Quick recap….. Its not free! Its not for everyone! But can help to deliver impact at greater scale. Isn't that the mission? Investors bring focus on outcomes, which can drive innovation and take delivery risks public sector often can’t Insights from data, adapting services to improve delivery & impact is key.