1. Growing the local social economy
with place based investment
Chris Dadson
Business Development Manager
The SIB Group are
+

2. About SIB Group

3. Place based social investment
Minister for Civil Society, Nick Hurd MP:
“I am interested in the opportunity for place
based investment to provide communities and
social enterprises with the finance they need to
build a strong, local economy and create real
social benefit. I would encourage Local
Authorities and Local Enterprise Partnerships to
engage with the sector and consider establishing
a Local Impact Fund in their area.”

4. Local Impact Funds: Overview
• ‘Local Impact Funds’ can help direct investment into local places to increase
jobs and growth in local areas, grow a social economy and support social
entrepreneurship.
• Local Impact Funds are a key mechanism for delivering place based social
investment. They:
• Combine wrap around business support with growth investment.
• Connect European, national and local supply with local demand for
finance.
• Support local economic and public services strategies.
• Two pilot Local Impact Funds will be launched in early 2014.
• Local Impact Funds will build on existing local and national infrastructure and
business support: enhancing and not duplicating the activity of local
organisations.

5. Local Impact Funds: Context and rationale
Charities and social enterprises make a positive difference to society and the
economy
• 38% work in the 20% most deprived communities in the UK (compared to only 12%
of SMEs).
• £1 public spend into social enterprises creates £6.25-£8.33 of GVA (£3.57 across all
markets).
There is a massive unmet 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 money available to grow the supply of social investment
• BSC - £600m
• £6bn of European Structural and Investment Funds, 2014-20, can be drawn on.
What is now needed are the mechanisms for connecting supply to demand…

6. Local Impact Funds: Vision
• 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 of their journey, from start up to sustainability
and growth.
• Draw together into one place an appropriate blend of national and local
actors and interventions, achieving more through the sum of its parts.
• Support social economic growth anywhere in the world, therefore learning
will be shared with interested partners across Europe.

7. Local Impact Funds: Framework
• Source investable charities and
social enterprises, identify potential
future investees, and assess their
support needs.
• Support charities and social
enterprises on their journey
towards growth and sustainability,
drawing on existing support, and
designing new support structures
where relevant.
• Fund them in a way that is flexible
and responsive to their needs, not
the needs of investors.
Encourage continuous learning and evaluates
what works best in a local area.

8. Local Impact Funds: Importance of ‘Local’
• 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…

9. Local Impact Funds: Model
Key Questions
Terms of EU money?
Pari passu? Grant
component? First
loss?
How much pipeline
support is needed?
Who pays for costs?
Set up costs.
Legal costs.
Evaluation

10. Pipeline support modelling
Start up
Incubation
100% grant
100% grant 100% grant
100% grant (25%
repayable)
100% loan
Range
< £5,000
< £25,000
£10,000 - £75,000
£50,000 - £150,000
tbc
Amount
£3,000
£17,500
£50,000
£100,000
tbc
Volume
500*
250*
50*
5*
100
Total
£1.5m
£4.375m
£2.5m
£0.5m
£10m
•
Capacity building Investment
readiness
Local Impact
Funds
* Work still needs to be done to clarify the pipeline volumes needed to support
each LIF

11. Key milestones
Milestones
Local Impact Funds referenced in BIS preliminary guidance to LEPs
April 2013
Local Impact Funds included in supplementary guidance to LEPs
July 2013
Launch of the prospectus and information sharing events
September 2013
Launch of the 2 pilot Local Impact Funds
Early 2014
Gain EC agreement for operational programmes
January 2014
LEPs to commission proposals for Local Impact Funds, as relevant
March – September 2014
First full Local Impact Funds become established
Early 2015
Local Impact Funds rolled out across England. Aspiration for up to
20 Local Impact Funds to be created.
2015 - 2020

12. 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 world’s first Local Impact Fund.
• We are on target to establish a second pilot (in Northamptonshire) with
investment from new entrants into the social investment market.
• We will conduct an early evaluation of both pilots in 2014 in order to share
learning with interested stakeholders.
• We are working in partnership with the Key Fund to manage a network of Local
Impact Funds across England.
• 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.

13. Liverpool City Region Impact Fund
1. The Liverpool City Region (LCR) Impact Fund is being designed as a partnership
between the Adventure Capital Fund (the parent charity of the Social Investment
Business Group) and Social Enterprise North West (SENW).
2. We are looking to launch the £2m 18 month pilot Fund on 23 January 2014, to
invest into c.20 charities and social enterprises by June 2015.
3. This pilot draws on existing ERDF investment from the 2007-13 programme, and is
linked to an existing project: Big Enterprise in Communities (BEiC) programme.
4. BEiC is a £7m business support programme for Liverpool City Region being run
by SENW, and will provide the Fund with a pipeline of investable organisations.
5. We will match the £1m ERDF investment into the Fund with a £1m investment of
ACF’s Communitybuilders endowment.
6. We are applying to Big Society Capital (BSC) for further investment into this fund.

14. Northamptonshire Impact Fund
1. The Northamptonshire Impact Fund is being developed in partnership between SIB,
the University of Northampton and UnLtd.
2. We are looking to launch the c. £6m 18 month pilot Fund in April 2014.
3. As there is no ERDF investment from the 2007-13 programme to access for this,
other investors have been approached: local public and private investors have
committed £2m.
4. This Fund will support charities and social enterprises around the service
transformation agenda, helping them deliver more contracts in public service
markets.
5. An ‘ecosystem of support’ is being designed alongside this Fund, building on
existing support that the University of Northampton and UnLtd already provide to
social enterprises.
6. SIB will also invest £1m in this Fund, and has submitted an application to BSC for
further investment.

15. More information about us
www.sibgroup.org.uk
@TheSocialInvest
020 7842 7788