Sometimes it takes something ‘left field’ in one’s life to fully appreciate the work of the charitable sector. Charity fundraising techniques have been called into question recently and clearly some of the methods used have been unacceptable, however this should not distract from the important work being carried out by these organisations.
I have a daughter with Downs syndrome and a wife who had cancer, and hence I’ve witnessed first-hand the amazing support available from charities. And before I started Kin Capital I was determined to give some of my time and skills to help a charity and last year became a trustee of the Octavia Foundation which supports the young and the old in the tri-borough area of West London.
That is why when the Social Investment Tax Relief (SITR) was announced we wanted to launch a SITR fund that stacked up as an investment proposition, but also generated a social return. Our concern was that, like the EIS sector, funds would be diverted from charities to infrastructure projects. Hence the Bright Futures SITR Fund will lend to established social enterprises – looking to use innovative solutions to address social issues.
This comes at a time when need is on the rise with radical changes to the welfare bill (regardless as to whether you agree with the cuts or not it will impact those most in need). Plus given the recent fundraising issues surrounding charities donors want to see funds used wisely/commercially, which an investment (rather than a donation) can promote.
However, this is an investment from an investor’s investment pot rather than philanthropy funds, with a recent Barclays Wealth research paper suggesting that a rise in impact investment would not be to the detriment of investors’ charitable donations, with only 7% of those surveyed saying they would reduce the value of their gifts.
The same survey found that more than half (56 per cent) reported an interest in making impact investments. Investors are willing to accept a lower level of investment return if there is a social return benefitting society. At Octavia we calculated that for every £1 spent there is £28 generated of social benefit which is attractive for those socially conscious investors.
Octavia was founded by Octavia Hill, the Victorian philanthropist and social reformer who began her work with the poor of London 150 years ago; she was a pioneer of social housing, a founder of the National Trust and the first clean air campaigner for London. She was a remarkable lady who proved that you could have a positive social outcome and generate a financial return at the same time. That is exactly the aim of the Bright Futures SITR Fund.