Wednesday, 30 March 2011

Give Greg a clap!

The government have announced today that they are transferring the money in the Communitybuilders programme. Directly into the Social Investment Business as an endowment .

Communitybuilders is now an endowed fund, owned and administered by the charity, the Adventure Capital Fund ( part of the Social investment Business )who can now continue to fund and support community enterprise projects beyond the end of March 2011 when the scheme was due to cease .

This is great news for community enterprises and the sector more broadly. It will be a source of funding for the foreseeable future and shows the Government’s commitment to support the development of the sector and its role in empowering citizens and communities .

It is a bold step to take a big slice of public funds and endow it to a charity. It makes complete and logical sense as it frees us up to provide more flexible and innovative loans and gives us the potential for leverage.

It is a real endorsement of the success of the Communitybuilders Fund to date and of ACF’s pioneering model of social investment over the last decade. The ACF has been making investments in community enterprises since 2003. It has been subject to a very positive external evaluation.

One of the key findings of that evaluation was that you can make loans to quite small organisations and help them thrive. It also shows how loans help drive more sustainable organisations. The report should be read by all those loan deniers out there who think that loans are a satanic tool.

As well as loans the approach has been one of " engaged investing" so loans are coupled with a range of investment tools and support services to organisations looking to develop income streams to become more sustainable.

It has demonstrated the power of loans. Now we can do more of them!

The endowment will obviously concentrate on making more loans, and so creating a fund which will recycle repayments back into the sector. But we are also going to pause and give thought to how best develop our social investments.

I’ve blogged before about the value of loan finance to sector organisations; this endowment means we can support many more third sector organisations into the future, helping them to become financially stronger at the same time as they deliver new community hubs, regenerate neighbourhoods and work with their local council to take on asset transfer projects.

The Communitybuilders programme operates around the country. And has invested in volunteer-run radio stations, a " community university", adult education classes and family support services for people living in some of our most deprived areas. We have enabled organisations to invest in buying farms , churches and ships! We invested in a brilliant sustainability project in Manchester which recycles waste produce from the Market.

I’ve been the Chair of the ACF , part of The Social Investment Business, since September 2006. Its been a great experience!

Now politicians often get brickbats so when they do something visionary they deserve strong credit, so I would like to pay tribute in particular to the local government Minister Greg Clark MP who recognised the value of making an endowment as a way of levering capital and gave it his crucial backing. Without the bold political decision to do this , it would not have happened. Greg understands the power of loans to grow community enterprise so was prepared to back the endowment idea and to make it happen, and it even got crucial HMT backing ( so thank you Justine Greening MP too! )

The endowment approach creates a blueprint for how to get the best value from government funds in the future, and so we are looking at how his approach might work for the running of the Health social investment fund and for the Futurebuilders loan book.

Great news!

1 comment:

european said...

Very interesting. We should talk...