Head of Investment
26th January 2022
Today’s Adebowale Commission findings echo our own evidence that on the whole 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.
But there is much more that needs to be done, and this 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 imminently, is unique in several ways:
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.