The social investment market in the UK is growing rapidly, with transaction values rising from £165 million to £1.1 billion over the last ten years. Power to Change sees social investment as being a key funding approach to develop the community business market. Working through the Key Fund and Social and Sustainable Capital (SASC) they have invested £5.1 million in community businesses.
The approach Key Fund and SASC took was to offer ‘blended finance’ in the form of grants, loans, and importantly business advice to investee organisations. Most of the businesses supported were working in disadvantaged neighbourhoods, often offering goods and services that private businesses have long ceased to provide. The provision of finance on a patient basis and involving some initial grant element was found to be essential to the longer-term development of viable community businesses.
The types of community business supported were wide ranging, including housing and accommodation, energy, employment and skills support, and provision of goods. This mix was seen as being important to the Power to Change portfolio, with particular growth opportunities seen around accommodation and housing (both social housing provision but also provision of refuges).