Social Investment Explained

What is Social Investment?

Sheffield has a strong legacy, pioneering investment for social enterprise.

It is a form of finance that was created to meet a very real need, to help neighbourhoods regenerate – by supporting community and social enterprises, creating jobs, and generating positive social impact.

Key Fund offers charities, community organisations and social enterprises in the North, Yorkshire and across the Midlands, social investment.

This is repayable finance to help social enterprises increase their impact on society, usually by supporting their business and trading arms to set up, become more sustainable, or grow.

It’s important to be aware social investment is a repayable loan, with interest.

Social investment is not suitable for all. It’s important to explore all finance options before taking on loans for social investment.

Blended Finance

One of the benefits of Key Fund is it specialises in ‘Blended’ – part grant, part loan social investment.

Many social enterprises will have a mix of finance, from trading activities, contracts to deliver public services, grants, donations and social investment.

What is Social Investment Used for?

Investment for social enterprise can be used as working capital or buying assets.​​

For example, Key Fund provided social investment to OPAL, which supports older people to live happy, healthy lives in Leeds.

Age UK reports half a million older people go at least five or six days a week without seeing or speaking to anyone at all.

OPAL took out social investment from Key Fund to buy an asset – an empty pub, The Bedford Arms – and renovate it for their drop-in centre.

They needed loans for social investment to achieve this. It was a social investment they knew would embed certainty into their future.

Opal - Social Investment Explained

When might you use it?

Typically, if you’re a start-up seeking some grant support to help with start-up costs, or you’re an established organisation with expansion and growth plans, but you need a little support to establish the new activities or expansion until you generate enough profit to repay any loans.

Yorkshire Social Investment: The Impact

Now known as the Welcome In Community Centre, it boasts a café, hosts exercise classes, coffee afternoons, a luncheon club, tea dance, computer lessons, Dementia Project, table tennis group, carers group and drop-in centre.

Services include practical support, such as shopping, emotional support with befriending schemes, phone checks and peer support, learning, health and wellbeing, including hot meals.

In the last four years, OPAL (as a charity and social enterprise) raised over £500,000 social investment for the renovation.

The centre was particularly valuable during Covid lockdowns, as Leeds City Council designated OPAL as a Covid-19 support hub for its area. The team delivered hot meals to vulnerable older people, co-ordinated a phone buddy scheme, as well as shopping and delivering prescriptions.

Yorkshire social investment enabled OPAL to move to the new premises and for the space to become usable and income generating.

https://www.opal-project.org.uk/

Loans for Social Investment

One of the barriers many social enterprises face is being turned down for finance. This is particularly true for start-ups or those without assets. The good news is if you’re seeking social investment, Sheffield’s Key Fund was set up to meet this need.

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