North of the border, in Scotland, communities have been transformed through social investment. Alastair Davis, chief executive of Social Investment Scotland is now calling on the North East to follow its neighbour’s lead.
Throughout the region, charities and community organisations are crying out for financial help – yet, often, the problem isn’t lack of available funding; it is knowing where to find it.
Banks can be reluctant to offer loans to social enterprises for many reasons and equally, the enterprises themselves can be risk averse, relying on peripatetic grants and donations.
This is where social investment funding comes in. Social investment funds provided by organisations, such as Social Investment Scotland, have helped to fill this void to support growth in charities, community organisations and social enterprises.
Indeed, SIS is the largest investor of its type in Scotland and is a social enterprise in its own right, operating in partnership with a range of organisations who also have an interest in this field.
North East Social Investment Company (NESIC) has been set up to help stimulate the market for social investment in the North East, in order to create social change and help create a climate in which it can thrive. Its first fund, the £9 million North East Social Investment Fund, is run on behalf of NESIC, by Northstar Ventures and it has already made its first two investments
Alastair Davis is a board member of NESIC he said “There is still a lack of awareness within the North East about what social investment is and who it benefits,” he said. “It is simply a repayable loan given to a charity or social enterprise, formed to benefit the community in some way.
“In my view, there are two key groups of people we need to reach. The first is the social enterprises themselves and the second is business leaders and those in control of local authority budgets.
“Council-run community services, such as childcare and the care for the elderly, are vulnerable in the wake of Government funding cuts.
“Yet if the people who provided care in the home, for example, were to form their own social enterprise then those services could not only continue, but the impact on the public purse would be significantly reduced.
“And existing enterprises have proved that the quality of service can improve when the staff stop being employees and become stakeholders with a vested interest in the success of their organisation.
“To really maximise the benefits of social investment, however, there needs to be communication within the eco-system of the North East: between local government, the private sector and third sector.”
“NESIC has a real opportunity to raise the profile of social investment, so that social enterprises and local authorities are aware that there is a source of funding which will directly benefit local communities.
“Of course, social investment isn’t appropriate for every organisation but there is an increasing desire among the financial communities to provide funding and, as a business model, there is no doubt that social investment works.
“It is a new way of funding vital community services and interests, using private rather than public money so everyone benefits and NESIC plays a pivotal role in the process.
“Anyone wanting to either find out about social investment or to apply for it should contact North East Social Investment Fund at www.northstarventures.co.uk and, if it turns out to be the right way forward the Fund managers will be at their side at every step of the way.
“I have seen at first hand that social investment works. It has worked and continues to work in Scotland and it will work in the North East.”