The SIB Group are

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Growing the local social economy with place based investment

Chris DadsonBusiness Development Manager

About SIB Group

• ‘Local Impact Funds’ direct investment into local areas to increase jobs and growth, grow a social economy and support social entrepreneurship.

• Local Impact Funds can deliver ‘place based social investment’. They:

• Combine wrap around business support with growth investment.

• Connect EU, national and local supply with local demand for finance.

• Support local economic and public services strategies.

• The Liverpool pilot fund was launched in January, we are looking to launch a second pilot fund in Northamptonshire before the summer.

• 10-20 Local Impact Funds could be set up over 2014-17.

Local Impact Funds: Overview

Charities and social enterprises have a positive impact on society and economy

• 38% work in the 20% most deprived communities in UK (compared to 12% SMEs).• £1 public investment generates £6.25-£8.33 of GVA (£3.57 across all markets).

There is a demand for social investment

• £1.3bn - £2.1bn annual demand for social investment, £286m of deals in 2012.• 38% annual growth of the social investment market: £1bn of done deals in 2016.

There is a supply of social investment

• BSC - £600m.• €6bn of EU funds, 2014-20, can be drawn on.

We need mechanisms for connecting supply to demand…

Local Impact Funds: Context and rationale

• Be locally driven, flexible, and responsive to need and context.

• Provide a tailored package of support and finance for charities and social enterprises at all stages, from start up to sustainability and growth.

• Build on existing local infrastructure and support, drawing into one place an appropriate blend of national and local actors, enhancing not duplicating activity.

• Support social economic growth anywhere in the world. Don’t rely just on EU funds, as any group of interested partners could collaborate on this initiative.

Local Impact Funds: Vision

• Charities and social enterprises need to sell their products and services into functioning local markets if they are to thrive.

• Local stakeholders can help enable the sustainability of Local Impact Funds:• Clinical Commissioning Groups (CCGs)• Local Authorities• Police Crime Commissioners (PCCs)• Other ‘buying’ institutions such as Universities, Housing Associations and

large local employers.

• Ultimately the Local Impact Fund can be an engine for public service reform, and provide a hook for corporates to support the sector through CSR activity.

• The new Social Investment Tax Relief is a big opportunity to attract new and local investors into solving local problems.

The time is now to make the most of these opportunities…

Local Impact Funds: Importance of ‘Local’

Local Impact Funds: Model

Type of investment:

• Unsecured loans

Investment terms:

• £50,000 - £250,000 (av. c.£100,000)

• Up to 5 years

Pipeline support:

• Start up, incubation, investment readiness

• Different in each LIF area

1. The Liverpool City Region Impact Fund (LCRIF) is a partnership between the Adventure Capital Fund (SIB’s parent charity) and Social Enterprise North West.

2. We launched the £2m pilot Fund in January 2014. It will be open to applications from charities and social enterprises in the LCR from 1 April 2014.

3. It draws on £1m of existing EU investment from the 2007-13 programme, which ACF is matching with £1m from its Communitybuilders fund.

4. The LCRIF is linked to an existing £7m business support programme, Big Enterprise in Communities (BEiC), being run by SENW.

5. The LCR LEP has allocated 2014-20 EU money to build on the pilot:• £1.7m of ESF, for a £3.4m wrap around business support programme.• £3m of ERDF, for a £6m Local Impact Fund.

GM and the 3 other North West LEPs are interested…

Liverpool City Region Impact Fund: pilot

Scaling the model up

• The SIB Group has successfully applied to run the Liverpool City Region Impact Fund and will manage ERDF as part of the UK’s first Local Impact Fund.

• We are on target to establish a second pilot in Northamptonshire.

• We will evaluate both pilots to share learning with interested stakeholders.

• We believe there may be demand for around 10 Local Impact Funds in 2014, and up to 10 in 2015 – 2017.

• We will share learning and work collaboratively through a network of partners who set up and manage Local Impact Funds.

• We are investigating the potential to create a template approach to developing, financing and managing a network of Local Impact Funds.

More information about us

www.sibgroup.org.uk

@TheSocialInvest

020 7842 7788