This is not a blog post about how amazing social investment is. This is not a blog post where I argue that, despite the difficulties facing charities, all can be fixed with a well-judged intervention from a very experienced social investor.
Our experience at CAF Venturesome is that, for every ambitiously-growing social enterprise, there is a well-established below-the-radar charity struggling to keep its head above water in a still-toxic environment of local authority cuts, suppressed grant-giving, and increasing demand for its services. This blog post is about those charities below the tip of the over-hyped iceberg.
A report by Lloyds Bank Foundation gives a solid base of evidence on the experience of 800 charities working in social welfare across England & Wales. Whilst the report strongly deserves reading in full, a few key findings jumped out:
- 63% have seen an increase in demand for their services - often as a result of stepping into a gap left by another organisation which has closed or withdrawn from delivering loss-making services, but compounded by recent welfare reforms;
- 49% find bidding for contracts to be difficult or impossible;
- 63% assume funding, particularly for core costs, and particularly for smaller charities, will get harder over the next two years.
Unfortunately, these findings tie closely with our experience from both our current portfolio and our pipeline of charities seeking social investment. Though we don’t always succeed, we strive to support these charities to become more resilient and thrive.
Is there a silver lining in this report? Not really, to be honest. The report is also a challenge to the social investment sector – the charities surveyed had limited understanding of social investment (which is not surprising, though our research makes clear that there is substantial unmet demand). What is clear to me is that these charities continue to need our support and advice – and it is crucial that social investors such as ourselves better understand the situation of those charities which may most need our help.
By Holly Piper, Head of CAF Venturesome
Holly (in picture) leads the CAF Venturesome team, including overall responsibility for CAF Venturesome’s funds and social investments. Since joining in 2012, Holly has led significant fundraising as well as managing a portfolio of innovative social investments. Holly previously worked at the management consultancy firm Oliver Wyman.
CAF Venturesome is a leading social investment fund, providing affordable unsecured loans to impactful social organisations. Since 2002, they have made over 490 social investments to a huge range of charities, social enterprises and community groups. More about their work is here: www.venturesome.org.
This post was previously published by CAF Venturesome