Geetha Rabindrakumar Slides: Health and Social Care SIG 22 April 2014

Social investmentACEVO Health and Social Care Forum

22 April 2014Geetha Rabindrakumar [email protected]

What is social investment?

It IS:the provision of finance to generate social and

financial returns

It is NOT:a grant – there is an expectation of repayment of the

finance, plus a return

Why is social investment beneficial?

• Fills financing gap for innovation and growth, increasing impact.

• Strengthens governance and accountability

• Brings in new groups of supporters, and their skills and experience.

• Capital is recycled for onward investment, increasing impact

• Investment practice aligned with mission

• Supporting sustainability in voluntary sector

For INVESTEES For INVESTORS

£109m £72m

BSC role as a wholesaler

Social investment to create positive impact for vulnerable groups

General Public / All

Long-term unemployed

Homeless

Addiction issues

Long-term health

issues, life threatening or terminal

illness

Living in poverty/are financially excluded

Learning disabilities or mental

health needs

Physical disabilities or sensory

impairment

Vulnerable young

people and NEETs

Vulnerable parents

Vulnerable children

Voluntary carers

Elderly (including those with dementia)

Ex-offenders

Experienced crime or

abuse

Employment, training and education

Housing and local facilities

Income and financial inclusion

Physical health

Mental health and well-being

Family, friends and relationships

Citizenship and community

Arts, heritage, sport and faith

Conservation of the natural environment

Outcome AreasBeneficiary groups

Eg Scope bond £2m 2012- Investment

used to grow fundraising and expand charity shops

- Investors included Foundations, Institutions, HNWs

http://www.bigsocietycapital.com/outcomes-matrix

VCS sector developed in health and social care

8% of social enterprises operate in health and social care.

Long track record providing £4.5-7bn of services

Have potential to improve service user outcomes

– Focus on prevention– Collaboration with service users – Close working with communities– Expert knowledge of local needs and preferences – Engagement with volunteers building social capital

Increasing demand for social investment

• Shift to PBR contracts• Increase in Social Impact Bonds that focus on

preventative services with potential for long term cash savings

Delivering outcome-based contracts

• Working capital for organisations shifting to new commissioning environmentBridging cash flow

• Supporting innovation in service delivery• Accessing new revenue streams from commissioners

Developing new services and products

• Developing new facilities to accommodate care usersPurchasing assets

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Charity bonds for property – eg Dementia care homes, Independent Living

• Golden Lane Housing issued £10m bond in 2013

• To provide adapted houses for people with learning disabilities supported by Mencap

Scaling social enterprise with motivated investors - Oomph! Wellness

“We wanted investors that shared our values: namely a commitment to strong commercial returns but never at the expense of the health and wellbeing of the older adults we exist to serve”

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Scaling up local community based services

• Supports some 4,900 of the most vulnerable adults across the country to live fulfilling lives as part of a family and community.

• Opportunity to drive a national expansion of high-quality community care.

• Social Finance is seeking to raise social investment to support the growth of Shared Lives across the country through an “Incubator”

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Community based personalised services – DERiC

Developing and Empowering Resources in Communities

DERiCProvides loans

CPCE franchise(Independent Brokers)- Produce care support plan- Provide volunteer services alongside commissioning care support- Share savings with LA

Service providers

- Foster local brokers

- Improve life experiences for older people through more community support & more effective use of personal budgets

SIB Model: To reduce loneliness and isolation amongst older people (in development by Social Finance)

Investment in services to reduce loneliness – benefits of reduced service use and improved health outcomes

Reduced loneliness

SIB SPV

Investment into SIB programme

Payments represent a % of cost savingsInvestors Commissioner

(eg LA)

Delivery programme (could include peer support, group activity, CBT for most isolated)

Lead delivery charity

Payment metric:Reduction in loneliness

- Pressing social need

- Engaged commissioner

- Complex social outcome to evidence

Support to prepare for investment

– For social ventures seeking to raise over £0.5m investment

– Grant (£50k-£150k) to cover cost of capacity building support (application joint with advisory firm – over 35 approved providers)

http://www.beinvestmentready.org.uk/social-ventures/

Big Potential (new - first half 2014)

- £10m fund over 3 years- For VCSE organisations seeking to

raise up to £500k investment (or contracts)

- Diagnostic tool assessment to check whether social investment is a realistic possibility

- Advisory support (apply jointly with an approved provider):

- Preliminary grants to build organisational capability (c£25k)

- Investment plan grants (c£45k)

- http://www.sibgroup.org.uk/bigpotential/

Other online information

1) Submit online queries to BSC investment teamhttp://www.bigsocietycapital.com/ask-us-question

2) Sources of funding currently open:http://www.bigsocietycapital.com/sources-investment

2) Directory of social finance providers and advisers (can filter for specific requirements):http://www.bigsocietycapital.com/finding-the-right-investment

3) NCVO guide and toolhttp://www.fundingcentral.org.uk/Page.aspx?SP=6059

4) Big Potential Website and Big Lottery Fund Guide to Social Investment (to launch by summer 2014)

Funds in 2014

Care and Wellbeing Healthcare

Charity Bonds SIB Fund

Property Funds Other sector focused funds…?

Finance for medium

enterprisesSmall unsecured

loans

Regional funds

(Scotland, NE)

Future Developments

Social Investment Tax Relief

BSC & BIG co-financed initiatives

ICRF 2 (Cabinet Office)

Community Assets Fund

Social ISAs (bond funds)

Manifesto development

Wider social investment ecosystem

OCS Social Incubator

Fund(£10m)

Big Venture Challenge (>£5m)

CO ICRF (£10m)

Stage of business growth

Commissioning/revenue support

Secured Loans

Unsecured Loans

Equity

Grant

Restricted Grant

Social Investment Funds (~£20m)

Start up Early GrowthEstablished

Type

of c

apita

l

BIG Potential(£10m)

CO Outcomes Fund (£10m)

BLF Outcomes Fund (£40m)

Fully or partly funded by government

Fully or partly funded by Big Lottery Fund

Partly capitalised by Big Society Capital

Other

Grant programmes from Charitable Trusts and Foundations (>£2bn)

Social Banks (~£180m)

Tech for Good

(£500K)

www.bigsocietycapital.comBig Society Capital Limited is registered in England and Wales at Companies House number 07599565.Our registered office is 5th Floor, Chronicle House, 72-78 Fleet Street, London EC4Y 1HY.Big Society Capital is authorised and regulated by Financial Conduct Authority number 568940.