1. Trustee Development Day

2. The social investment landscape
Scotland
Rob Griffiths
UD Policy Officer

3. Hello
What’s your name?
Name a charity or cause you feel passionate about and why? (don’t make it the SU!)
What motivated you to become a trustee? 3

4. Today Discover forms of social investment
Discuss social investment opportunities for SUs
Think creatively about implications for services

5. Why this? Why now? Social investments are increasingly established.
2 years since introduction of SITR.
Autonomous, secure, funded SUs.
Cultural opportunities?
Social Investment Scotland provided a total of £4.3m funding for more than 50 organisations across the country in the latest year.

6. Why are students’ unions charities?
2010 – £100k+ turnover
2013 – the rest
Access to expertise
Networks
Resources
Tax relief
Charitable grants
Can still behave like mutual co-operatives

7. Social investments

8. What is social investment? What would you use it for?
Social investment is any investment activity which has an expectation of both a social outcome and a financial return, which would usually be below market rate.
Capital investment
Revenue funding development
Capacity building
Sustainability
X Grants X Donations

9. What is social investment?
Benefits:
Below market rate
Unrestricted (within focus on social outcome)
Opportunity for active investors
Tax relief for investors

10. Social Investment Tax Relief
£3.4m has been invested across 30 organisations.
The amount of capital raised in an average deal is just over £100,000.
The average cost of capital is 4.8% pa over a five year period.
Average turnover of an enterprise raising SITR capital is £615,000.
Average assets of around £1m.
The majority have less than 10 employees.
Concentrated in Scotland and the South West.

11. Social Investment Tax Relief

12. Forms of social investment
Secured loans - Using tangible assets as collateral
Growth capital
Working capital facility
Pre-funding of fundraising
Bridging loans
Overdraft facility

13. Case studies Loan Investment £75k Cost 6.5% Duration 5 years
CAF Venturesome
(Investment fund)
Headliners UK
(Charity)
Loan
Investment £75k
Cost 6.5%
Duration 5 years
“Offered based on their historic ability to secure grants from a variety of funders.”
“Repaid from unrestricted funds”
Journalism programme where young people research and produce stories for publication and broadcast about issues that concern them.
Turnover £600k

14. FC United of Manchester
Case studies
FC United of Manchester
FC United of Manchester’s community work engages with approximately 2,000 young people and vulnerable adults across North Manchester each year.
The club attracted investors for £270k investment to build a new stadium.
Investors will be repaid over 4 years through income generated by the club, such as membership fees, match day revenue, merchandise and season ticket sales.

15. Forms of social investment
Equity
Revenue participation
Crowd/community investment

16. Portpatrick Harbour Case study
The harbour was in urgent need of maintenance and development.
Livelihoods were at risk.
A Community Benefit Society was formed.
Money was raised by the community to refurbish the harbour and its facilities.
Individuals invested £100k through community shares.
The investment will be repaid over 5 years through income generated from visiting boats.
They benefit from social investment tax relief.

17. Forms of social investment
Social impact bonds (20%)
Charities
2. Purchase bonds
Private investors
1. Selects charities to deliver public sector outcomes
3. Pays back over time
“Payment by results”
Government

18. Aspire Gloucestershire
Case study
Aspire Gloucestershire
Helps the most vulnerable young homeless people in Gloucestershire. It improves accommodation options and provides education, training and employment opportunities.
Aspire Gloucestershire is funded through a £50k Social Impact Bond. Repayment is over 3 years under a “payment- by-results” contract with the Department of Communities and Local Government, out of long-term savings to the public purse.

19. For the voluntary sector
Opportunities?
+ Attracting investment!
+ More self-sufficient
Challenges?
- Loans for less than £250,000 can be uneconomical
- Capacity to access
- Impact evaluation

20. For SUs Opportunities + Good capacity to access investment
+ Good investment prospect + Way to fund income diversification
Challenges
Institution as lender of last resort

21. How could you use investment into your SU?

22. Outgoing investment Can charities make social investments?
What should trustees consider?
Case study
Northumbria SU
Secured loan
+ Good future income
More governance SU
Lettings agency

23. Engaging with students
Thought experiment
How could you redesign an existing service using models of social investment?
For inspiration:
Clubs and societies
Course reps
Commercial services
Advice services
Discuss the strengths and shortcomings of your ideas.

24. Emergency loans University of Manchester SU Short term loans of £100.
Repaid as soon as student loan comes in.

25. Events UWLSU Backing student events companies.
£500 budget + venue + marketing.
Revenue share agreement.