BIG ISSUE Invest, UnLtd, and Shift have jointly announced a growth fund “to level the social investment playing field”.
The social investment fund offers flexible and patient capital for early-stage social businesses to increase their impact, ringfencing at least 50 percent of funding for leaders from under-represented backgrounds.
It is backed with funding from supporters including Bank of America and Access Foundation.
The aim is to tackle “structural barriers of inequality within social investment”, as highlighted by the Adebowale Commission, which found that despite £600m of public investment since 2010, the social investment market remained unchanged.
The Growth Impact Fund has been developed by social entrepreneurs of both genders, and represents those of diverse ethnicities, ages, and with disabilities to address inequalities.
Funded by professional investors only, it will offer £50,000 to £1.5m to its investees to provide capital, or alternative options, including 70 percent of funding invested through equity and quasi-equity products.
It will also provide grant-funded, wrap-around support across the investment process, and commit to ensuring that the team, management, and governance of the fund are representative of the target entrepreneurs.
Every investee on the portfolio will have access to grants and non-financial assistance. A key criterion is that over 75 percent of the board — and 50 percent of the management team — of each social enterprise should identify as at least one of the inclusion groups: women, disabled people, black, Asian, minority ethnicity, Gypsy, Roma, or Traveller, or LGBTQIA+.
They must have “direct, lived experience of the social issues the social business is focused on” and have experienced socio-economic disadvantage. Organisations that don’t meet these criteria will be eligible if they can show commitment to improving diversity, equity, and inclusion.
The fund will use the Diversity, Equity and Inclusion (DEI) toolkit for assessment. An open-source version of the toolkit will be shared.
Chair of the Social Impact Investment Committee, Sara Redford, said the fund was structured “by listening to the sector”.
“The Growth Impact Fund will address the bias which we know can close doors to diverse-led organisations,” she said, “and share its learnings to wedge those doors open for more funds and entrepreneurs to follow.”