In this joint response to the Adebowale Commission on Social Investment report, UnLtd, Big Issue Invest and Shift confirm their commitment to equality and human potential in the social investment sector.
Today’s Adebowale Commission findings echo our own evidence that social investment does a poor job of reaching those it seeks to serve: social entrepreneurs. It demonstrates that institutional racism and other discrimination remain a critical problem for intermediaries to address. And, as we have repeatedly highlighted, more flexible, patient and equity or quasi-equity based finance is needed if the social economy is to regain its purpose.
It doesn’t have to be this way. Collectively, we are three organisations committed to rethinking how we invest, who we invest with, and changing the products we provide to meet the long-term, flexible support that diverse, early-stage social entrepreneurs need. Big Issue Invest has committed to invest 70% of funds in the four most deprived deciles of the index of multiple deprivation. UnLtd has committed that 50% of its early-stage funding will reach people from racialised communities, and disabled people. We have shown that it is possible to shift power to better meet the needs of entrepreneurs – and that when we do, there is no dearth of talent or lowered demand for our support. Our own commitments show how social investment can be different.
But there is much more that needs to be done, and this need change needs to happen across the sector. It requires major intermediaries, including ourselves, who represent access to the £6 Billion social investment market, to assess risk differently and embrace new ways of doing things.
Big Issue Invest, UnLtd and Shift have been working towards the kind of solution pointed to in this report. Our Growth Impact Fund, launching in the coming weeks, is unique in several ways:
- The fund will focus on diverse social enterprises tackling inequality. We’ve worked for 18 months with social entrepreneurs to design and develop something that is inclusive, accessible and focused on the needs of diverse founding teams.
- The fund will offer flexible, patient capital with 70% of funding invested through equity and quasi-equity products. The report highlights that this is a gaping chasm in the market that prevents many from accessing capital.
- Support is baked into the investment fund, with financial and non-financial resources committed to making sure funding goes where it is needed.
- An ‘of, not for’ approach to the delivery of the fund, with committee and advisory board members sought for their lived experience in the issues faced.
While we believe this fund is a step in the right direction, we recognise that there are many things we still don’t know and won’t get right. We are determined to contribute to a sector wide effort to learn and are committed to being fully transparent as to what is working and what isn’t. We want to work with others to open up, grow and diversify the social investment sector in order to help address the widening social and economic inequities we are faced with.
We desperately need the talents of Black-led and other minoritised founding teams if we are to meet the challenges of the next decade. Yet while diversity & inclusion funds remain necessary for now, we must work towards a world where inclusion is embedded in every social investor’s practice. It is now the norm to assess all investments for their potential to impact the climate crisis. Why not do the same for the ‘S’ in ESG, and ensure every entrepreneur has a fair chance of getting access to capital.
We’re all working towards the same goal – social investment meeting its promise to the next generation of social businesses. We urge intermediaries to listen and make social investment work for social entrepreneurs.