A social impact investment fund developed by Big Issue Invest (BII), UnLtd and Shift, has welcomed a host of new investors onboard.
This comes as the social impact investment fund completed its first close of £8.2million towards its £25million target size. Aimed at social enterprises and organisations from underrepresented backgrounds, the fund welcomed the following additional backers:
- Big Society Capital
- Greater Manchester Combined Authority
- The University of Edinburgh
- Trust for London
- Joseph Rowntree Foundation
- Charities Trust
- Barrow Cadbury Trust
- Nick Marple
The backers will join the existing major partners of the fund Bank of America and Access – the Foundation for Social Investment, who were both announced as coming onboard last year.
In tandem with the announcement, BII, UnLtd and Shift have renewed their call for applications from UK based entrepreneurs. They have done so as they look to grow in line with the news of further investment in the fund.
The fund’s purpose
The landmark fund aims to tackle inequality and promote racial justice by being built around the needs of entrepreneurs historically locked out of social investment. This was highlighted by the Adebowale Commission on Social Investment in 2022.
The fund has been designed and developed with social entrepreneurs of diverse genders, ethnicities, ages, and those with disabilities. Additionally, the fund offers flexible and patient capital for social businesses to grow their impact, ringfencing a minimum of 50 per cent of funding for leaders from underrepresented backgrounds.
A key eligibility criterion is that over 75 per cent of the board and 50 per cent of the management team of each social business should identify as at least one of the inclusion groups: women, disabled people; Black, Asian, minoritised ethnic, Gypsy, Roma, or Traveller; LGBTQIA+.
They must also have direct lived experience of the social issues the social business is focused on; have experienced socio-economic disadvantage.
Diversity, Equity and Inclusion (DEI) Toolkit
Complementary to the eligibility screening is a new resource being developed by Big Issue Invest, UnLtd, and Social Value UK. This resource is the Diversity, Equity and Inclusion (DEI) Toolkit.
The fund will use the toolkit to assess potential investees’ existing commitments and plans for improving DEI. Additionally, it will provide support where needed. As a result, an open-source version of the toolkit will be shared in the year ahead.
The fund, which is funded by professional investors only, will also offer between £50k – £2.5million to its investees.
Every investee in the portfolio will have access to grants and non-financial help to grow their social business and social impact. Investees can use the support for needs such as caring responsibilities, accessibility support, consultancy, or professional development.
Addressing social inequality
Dave Gorman, director of social responsibility and sustainability at the University of Edinburgh, said:
“Addressing social inequality and providing opportunities for all is at the heart of the University of Edinburgh as an institution. As a result, we are delighted to be part of the Growth Impact fund and look forward to working with a range of partners to diversify social investment, offer opportunities to underrepresented groups, and deliver a positive social impact nationwide.”
Cllr David Molyneux, Greater Manchester lead for Investment, said:
“We’re proud to be backing the Growth Impact fund and supporting social entrepreneurs to grow, develop, and make a positive contribution to their local communities and economies.
“We know that this is a tough time for lots of organisations in the sector. Particularly those from underrepresented backgrounds who may already be experiencing disadvantages or facing barriers to accessing funds. Therefore, we want to do all we can to help them and the vital work they do.
“This is also a prime example of how Greater Manchester is recycling funds to ensure that the investments we make continue to deliver benefits for people across Greater Manchester. This is in line with our vision for making this a better, fairer, more prosperous place to live and work.”
Creating greater inclusion
Sarah Faber, investment director for the fund, at Big Issue Invest, added:
“We are delighted to have our new investors backing diverse-led organisations across the UK. Everyone agrees that something needs to rectify inequalities in social investment. Consequently, by doing things differently, we hope that we can scale up some amazing entrepreneurs. Finally, we hope to make a difference to their communities who might not have been supported otherwise.”
Mathu Jeyaloganathan, head of investment at UnLtd, said:
“We’re very excited to welcome new investors on board. With their support, we will be aiming to put some money behind some game-changing diverse-led social enterprises tackling inequality in the UK. Keep an eye out for some investment announcements coming soon.”