- Area:
- UK-wide
- Release date:
- 20 9 2012
A lack of business skills means many Voluntary, Community and Social Enterprise (VCSE) organisations are missing out on investment lifelines according to new research commissioned by the Big Lottery Fund.
The UK-wide report into the social investment market, carried out by ClearlySo and New Philanthropy Capital, found that many groups seem to be unaware of what is required of them. Nearly half (47 per cent) of survey respondents who failed to secure investment felt they did not lack any financial, marketing, business or financial skills.
This contrasts with the views of investors who noted the lack of suitable financial skills among potential investees as a critical barrier.
The report, Growing the Social Investment Marketplace: Investment Readiness in the UK was carried out by ClearlySo in partnership with New Philanthropy Capital and received responses from 1255 organisations. It demonstrates a clear need for more support in the emerging social investment market as 43 per cent of organisations that were unsuccessful in securing funding reported that accessing advice was ‘difficult’. Almost one-in-three (32 per cent) of these organisations said that simply identifying who to go to for social investment was ‘very difficult.’
The findings of the research report will help in the creation of an Investment Readiness Fund to be launched by the Big Lottery Fund in 2013, which will contribute to the goal of supporting the development of the social investment market in England in a way that will enable VCSE organisations to better serve those most in need. It will be aimed at those organisations whose potential is not yet sufficiently developed to apply to the Cabinet Office Investment and Contract Readiness Fund, being delivered by The Social Investment Business Group, which is announcing its first £1 million of awards today to 8 social ventures.
As part of its commitment to exploring the possibilities of social investment the Big Lottery Fund has also signed up to a joint investment readiness charter along with the Cabinet Office, Nesta and Big Society Capital. The charter, launched today, outlines the key principles for supporting investment readiness.
Peter Wanless, Chief Executive of the Big Lottery Fund, said: ‘The Big Lottery Fund awards grants to a fantastic array of charities, community groups and social enterprises that have huge potential to build on the good work they are already doing. The Social Investment market could be an exciting opportunity for some VCSE groups to develop further and access a new source of finance. Readiness for such investment remains a challenge in many places and is a current focus of attention for investors, investees and other interested parties.
‘It is great that we are publishing this report on the same day as the announcement of the investment readiness charter and the first round of grants made from the Investment and Contract Readiness Fund. It demonstrates our commitment to work with others to support development of social investment, whilst ensuring our work in this area is based on sound evidence and our mission to support those most in need.
‘This research will help voluntary organisations to understand more about what investors are looking for and provide investors and intermediaries with a different perspective as we seek to secure increasing value from the emerging market for social investment.'
Katie Hill, Head of Research and Consultancy at ClearlySo, said: ‘We’ve identified a series of mismatches between VCSE organisations seeking capital and the investment community. A critical one is the mismatch between the type of risk capital being sought and the more secured lending that is available. Our report recommends tackling these gaps through well-designed investment readiness support.’
Iona Joy, Head of Charity Effectiveness at New Philanthropy Capital, said: ‘Although their perceptions of business, marketing and finance skills may differ from investors, NPC’s survey of investees and potential investees demonstrated a healthy appetite for advice, support, guidance and peer to peer contact. Respondents indicated that it can be difficult to get targeted advice and support; information on financial options and investors; and help with structuring and negotiating products and deals.However it was clear they would welcome advice and support on these issues.’
To read the full report, please visit www.biglotteryfund.org.uk/er_invest_ready.htm
Further Information
Big Lottery Fund Press Office: 020 7211 1888
Out of hours media contact: 07867 500 572
Full details of the Big Lottery Fund programmes and grant awards are available on the website: www.biglotteryfund.org.uk
Ask BIG a question here: https://ask.biglotteryfund.org.uk
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Notes to Editors
- The Big Lottery Fund (BIG), the largest distributor of National Lottery good cause funding, is responsible for giving out 40% of the money raised for good causes by the National Lottery.
- BIG is committed to bringing real improvements to communities and the lives of people most in need and has been rolling out grants to health, education, environment and charitable causes across the UK. Since June 2004 BIG has awarded over £4.4bn.
- The Fund was formally established by Parliament on 1 December 2006.
- Since the National Lottery began in 1994, 28p from every pound spent by the public has gone to good causes. As a result, over £28 billion has now been raised and more than 383,000 grants awarded across arts, sport, heritage, charities, health, education and the environment.
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