Financing social enterprise
Partnership between London South Bank University (Centre for Government and Charity Management Business Faculty) and CAN
Note: This short KTP provided useful direction in the business context at CAN. While it was not possible to identify major innovations for the sector as a whole, or new knowledge for the R&D community, important foundations have been laid for further development.
Objectives: To develop a new fund with different investors targeting social enterprises in the £200-500k region. The aim was to run the new fund on a self-sustaining basis by offering forms of loan and equity funding. The partnership was to develop understanding of different investment options, social impact and outcome measurement and KPI development, to aid funding decisions, and lead to improved investment strategies, leading to investment readiness consultancy opportunities.'
Results for the Company Partner
- As suggested by lead academic, the following aspects were expected to be useful: a) working with a university which specialises in the social sector; b) working to rigorous project discipline; c) obtaining early, radical results which challenged initial assumptions and reduced potential losses.
Results for the Associate (none provided)
Results for the Knowledge Base Partner
- An important learning experience, providing valuable insights into the role of investment intermediaries, and the numerous and complex variables they must balance in order to prosper in an immature but rapidly developing market. The main academic lessons from this were:
o Expect the unexpected (risk analysis and contingency management)
o Beware unquestioned assumptions about markets (positioning strategy over time)
o Consider the variables affecting the research (prioritise for targeting effort)
o Adopt a wide scanning process of investors and investees (excellent at CAN)
o Draw on the mass of empirical data to narrow the business case quickly
o Applied research often needs only those resources that are readily to hand
o Cost-benefit for commercial viability is fundamental to all investment decisions
o the focus on SROI from an investment intermediary's perspective;
o beginning to understand and map a dynamic multi-stakeholder environment;
o planning to help develop a range of funding and related services for maximising measurable social impact;
o R&D in a rapidly changing social and political context in the UK; e) working with committed professionals in a large, reputable organisation.
- Publications: an Academic Review report has been agreed with the key stakeholders. Potential for strategic growth planning and investment-readiness guidance in the social enterprise sector is significant. The KTP highlighted the need to develop models and measures which could be proposed for social investment funds to be 'traded' on an open, regulated exchange