World-leading fund helps charities and social enterprises win multi-million pound deals
Eight charities and social enterprises have won investments and contracts worth £35 million, thanks to a world-leading business support fund managed by the Social Investment Business and funded by the Cabinet Office, reveals a report released today.
The £10 million Investment and Contract Readiness Fund (ICRF) is the world’s first fund dedicated to helping charities and social enterprises acquire the skills they need to raise investment and compete for public service contracts, and it has already made a “significant and positive impact”, according to the independent review by The Boston Consulting Group (BCG).
Since May 2012 94 social ventures with high potential for growth have received grants worth £8.9 million to purchase specialist support such as legal advice, financial management and public service commissioning. Some 74 are still actively carrying out their business support programmes.
Grants worth £815,144 have already helped the first eight ventures to win deals worth £34.9 million. They include:
Pure Innovations, whose £52,250 grant helped it win a five-year contract worth £11.7 million from the Royal Borough of Kingston to take over the running of its learning disability service.
Empower Community, whose £108,650 ICRF grant helped it secure a £10.1 million loan from a UK institutional pension investor, which will allow it to provide free daytime solar energy to social housing tenants in more than 2300 homes in Sunderland.
Greenwich Leisure Limited, whose £129,000 ICRF grant helped it raise £5 million through a bond issue, ensuring that two London 2012 Olympic venues – the Aquatic Centre and the Copper Box arena - are available to local residents as well as elite sportsmen and women.
Midlands Together, whose £149,300 ICRF grant helped it raise £3 million through a bond issue to set up a programme to rehabilitate up to 150 ex-offenders over five years by providing jobs renovating properties in Birmingham and the Black Country.
Jonathan Jenkins, CEO of the Social Investment Business, said: “These success stories show how modest levels of targeted business support can make ambitious charities and social enterprises much more successful at raising the investment they need to expand their activities and winning contracts to provide public services.
“We want to build on the success of the ICRF and use business support grants to help charities and social enterprises win the funding they need to deliver bigger and better services tailored to the needs of their communities, create more jobs and boost their local economies.”
Nick Hurd, Minister for Civil Society, said: “Social ventures need our backing to grow and compete for public service contracts and that is what the Investment and Contract Readiness fund is for. Britain is blessed with fantastic charities and social enterprises which work to improve society and contribute to the economy, and I am pleased that this fund - the first of its kind anywhere in the world - is making such a positive impact so quickly.”
The ICRF aims to ensure that social ventures with high potential for growth are better equipped to secure investment and compete for public service contracts. Organisations looking to raise at least £500,000 in investment or win contracts worth £1 million or more, can apply for grants of £50,000 to £150,000 to purchase the specialist support they need.
Doug Cresswell, CEO of Pure Group, which includes Pure Innovations, said they had had a poor record of winning tenders in the past: “The ICRF grant has made a very tangible and positive difference. It enabled us to undertake a focussed review of our growth plans and crucially to secure high-quality tendering and bid-writing support. As a result of winning the Kingston contract we have significantly increased our group turnover and rapidly extended our reach to vulnerable people.”
The Government is committed to growing the social investment market. It set up Big Society Capital with £600 million of funds to invest in new projects that will benefit society, via intermediaries like the Social Investment Business. It is also encouraging social ventures to bid for public sector contracts, because they can deliver services tailored to the specific needs of their community.
However, development of the social sector has been held back because many charities and social enterprises lack the skills or experience to successfully raise investment or compete for public sector contracts. Many have also been unable or unwilling to pay for specialist support and there has been a limited market of organisations offering these services.
The BCG report, Ready, Willing and Able, An interim review of the Investment and Contract Readiness Fund found that the ICRF had already had a “significant and positive impact” against these obstacles:
The nearly £35 million of investment raised and contracts won with support of the ICRF was “impressive” and in line with expectations;
Ventures reported significant increases in their skills and knowledge and 70% thought they would need less help in the future;
The ICRF had grown the market in providing business support services to charities and social enterprises, and ventures were starting to become more willing to pay for them as they became aware of the benefits they could bring