Skip to main content

This blog has been cross-posted from the Connect Fund website.  The author, Ruby Frankland, is the Connect Fund Manager at the Barrow Cadbury Trust.

It sounds obvious, but everything around us is the result of design. Even the way we work in the social investment sector is ‘designed’ through a series of conscious and unconscious choices made under a framework of values. The most dominant influence of these design choices is of course the existing financial system. In many ways, the social investment sector has been created in the shadow of traditional finance. But this is a problem as the social investment market is not there to mirror the traditional financial market. It has the much broader, more imaginative (and more difficult to measure) goal of social value.

The mechanisms of traditional finance are designed for purely capitalist businesses — where the single axis is to make profit. Since the VCSE sector is designed to solve social and environmental challenges, it is well-equipped with ‘multi-axis’ thinking to address systematic inequalities. As such, the value of social innovation, charities and enterprise to support communities is becoming well-established in emergent design practice. The design of the supporting financial infrastructure, however, frequently uses the same traditional tools and framing. This results in a reproduction of the values coded into that system. So where does that leave us? The processes and tools we use need to be redesigned to suit the goals we are trying to achieve.

At the Connect Fund we are really interested in digging deeper into methods of participatory or community-led investing that unpick the design of traditional finance and reimagine investment for the benefit of communities first. That is, ‘the practice of investing with meaningful input, decision-making power, and ownership from grassroots stakeholders’.

In the same tradition of participatory action research and co-design, participatory investment essentially means including end-users in design and delivery of investment decisions in a meaningful way. It is important to differentiate here from processes which employ user-centred design, where the client or end-user is the subject of observation as a source for improvements. In the participatory or co-creation process, the end-user is understood as an equal partner and is actively involved throughout the creation process.

At Connect Fund we are really excited to announce funding the first of our projects in the Challenging Power with Participation strand:

Democratic Money

Barking and Dagenham Giving (B&D Giving) will work with The Curiosity Society (TCS) to give ordinary people more control over how money is generated, distributed, and used. B&D Giving will extend the work of their Community Steering Group — CSG, a group of residents that has led the design of their Investment Policy, by onboarding new members and creating an alumni community. It will create a dashboard to monitor the impact of the investments and a digital learning platform to increase community engagement and expand participation. Their long-term partner, Curiosity Society will support partners in different geographical areas to learn from this model and build their own versions of democratic money. This will include testing in three new locations and delivering shareable tools for those seeking to engage in re-imagining financial decision-making.

Impact Custodian Investment Committee

This pilot project from Shift Design will focus on the structure of social investment committees, which predominately favours ‘learned experience’ rather than the ‘lived experience’. The project will mitigate the potential for decision-making bias to misjudge the potential risks and returns and will form an Impact Custodian Investment Committee of individuals with relevant lived experience acting as stewards on behalf of their community. Working with Trust for London to trial using improved assessment criteria and insights that better balance ‘lived experience’ and the ‘learned experience’ of the investment team and due diligence process. Alongside this work, it will assemble a social investor Consortium of 5–7 organisations interested in changing how they make decisions.

If you are interested in applying to the Connect Fund’s Challenging Power with Participation strand take a look at our guidelines.

As part of the Connect Fund evaluation, Niamh Goggin, our Evaluation and Learning Partner, looks back at five projects funded by the Fund and their journey towards strengthening Equality, Diversity and Inclusion in the UK social investment sector. While EDI is receiving more attention recently, some organisations have been working to change policy and practice for years.

This mini-report provides a summary of the scale of the EDI issue before identifying common themes that characterised the successful EDI strategies of Voice for Change England, Black South West Network and GMCVO.   

From its inception in 2017, the Connect Fund had a strong focus on making the social investment market more open, diverse and accessible. The 2017 survey of diversity in the social investment field [1] found “A bleak picture for Black, Asian and Minority Ethnic (BAME [2]) inclusion.” While there was 30% representation in operational roles, there was a significant dip in transitions to management roles, with just 9% representation. There was also a clear drop-off in women transitioning or recruited from operational roles (56%) to executive/leadership roles (28%). Awareness of this issue led the Connect Fund to provide grant funding, from its first phase of operation onwards, to bring in new voices to create a more diverse social investment market.

This blog focuses on five Connect Fund projects delivered by three organisations, which aimed to connect black and minority communities with social investment, to improve awareness of social investment and its possibilities and to change the design and delivery of social investment to suit the needs and requirements of those communities. The organisations and projects are:

Connecting with Black and Minority Ethnic Communities

Representation of female directors and BAME managers has fallen in the sector since 2017 [4]. Black and minority communities are not represented where decisions on funding and support are being made. The three organisations identified key requirements for inclusivity;

  1. Time; engaging with these communities over many years, to build relationships, understanding and knowledge. GMCVO has been supporting the GM BAME network and leaders’ group since 2013. Voice4Change England started their journey in 2015, with the Bridging the Gap report on the experience of 100 BAME charities and community groups. BSWN developed its focus on inclusive economic growth and development from 2016.
  2. Place; “The challenges facing Manchester are different from those in Rochdale.” In the South-West, conversations were held over time, about poverty and economic dislocation; criminal justice and mental health and understanding an economic system that doesn’t work for Black and Minority Ethnic communities. Voice4Change England identified and went to the “groups out there ready to take on social investment” in Bristol, Manchester, Hastings and London.
  3. Trust; The social investment sector needs to build trust with communities that see the sector as “less diverse, less inclusive, less equal .. (technocratic) more focused on tools and the technical element.” “It’s not just ethnicity, (it is) knowledge, social economics….(It) should be driven by the social issues…”

Researching, Learning, Engaging

All three organisations focused initially on research and learning, employing Black and Minority Ethnic researchers to analyse and report on the disconnect between those communities, VCSE organisations and the social investment sector. Voice4Change England researched and engaged to identify barriers for B&ME VSCEs to take up social investment. BSWN mapped the existing B&ME social enterprise sector across the South-West, providing data on size, locations, specialisms and identifying barriers to accessing social investment. GMCVO began with a project researching perception and experience. They developed the engagement process to deliver two-way learning – learning from and about the communities and sharing information and experience of social investment.

Fund and Product Design

All three organisations identified problems relating to fund, product design and the characteristics of the capital supplied to social investment intermediaries. “Taking investment banking and inserting it into the charity sector doesn’t work.” There isn’t a consistent offer available for charity and social enterprise organisations as and when they need it, with opening and closing “windows” and relatively short periods before the capital has to be returned. B&ME-led charities and social enterprises are likely to be smaller than their peers, with lower turnover, smaller average grant sizes and more fragile finances. Some of them will need access to smaller investments – “a £10k injection to improve your cashflow.” “The challenge is fitting the product to the need”. Sumerian’s venture philanthropy approach was commended for its focus on supporting the organisation towards making a profit and then sharing the return – similar in concept to Sharia finance.

Influencing and Changing the Sector

The GM BAME Social Enterprise Network started with 30 organisations and now has around 120 members. They partner with mainstream providers such as the School for Social Entrepreneurs. The network is still supported by GMCVO but is an independent entity, making its own decisions. They also look outside the social sector, for example engaging with Lloyds Bank on setting up banking services and support for social entrepreneurs.

GM Social Investment is GMCVO’s social investment service, with a mission to tackle inequality and exclusion. Twenty-six per cent of their investments are made to BAME-led organisations and the aim is to “reflect their community”. For the future, GMCVO’s ambition is for an “evergreen” fund, that doesn’t have to be returned to an investor after a defined term, so that there is a permanent circulation of funds in the local economy. They identify the importance of building inclusive leadership, empowering and supporting local communities to engage with social investment, so that financial experience is balanced by local knowledge and awareness.

At a local level, BSWN has identified the challenge for B&ME social entrepreneurs who need research and development funding to launch their social enterprise and is addressing the problem through the Local Access Programme. This will help to develop the social investment pipeline. At a sectoral level, BSWN is concentrating on supporting a culture shift in social investment, including among the intermediary organisations. Social investment product design needs to be driven by addressing the social need and strengthening the social entrepreneurs and their communities. Financial returns will be delivered by impactful, profitable organisations.


Greater Manchester (GMCVO) and Bristol (BSWN) are two of the six areas that were chosen as part of the Big Society Capital and Access – the Foundation for Social Investment’s flagship “Local Access Programme”. The programme aims to support the development of stronger, more resilient and sustainable social economies in disadvantaged places. The programme is financed by £10m of dormant accounts money and £15m of repayable social investment funded by Big Society Capital. Both organisations are confident that their Connect Fund projects were important contributors both to the motivation to apply and in providing evidence of what works in strengthening the social enterprise sector.

BSWN has developed a strategic inclusive partnership with Power to Change, supporting community businesses. It is also determined not to be seen in collaborations as the “inclusive” partner, but to drive inclusion in the organisations it works with.

V4CE has engaged with a range of stakeholders to raise awareness of the opportunity for a B&ME social investment fund. They are also learning from international experience, including from Morgan Simons They are modelling a proposal for a B&ME Blended Fund, providing an appropriate mix of grant and loan, with significant external support from a combination of private donors and large corporates.

The five projects delivered by three organisations have already contributed significantly to the development of a more diverse and inclusive social investment sector. Their research has shown that B&ME-led organisations, which tend to be smaller, less well-resourced and financially fragile, will need access to finance in a bespoke blend of grants and social investment. They are clear that social investment is only part of a package that should include technical assistance, networking and peer support. B&ME leaders want more than a seat at the table. They are progressing plans to develop their own pilot funds, which hopefully will serve as an example to similar new funds, as well as engaging to improve the design and delivery of existing funds. The social investment sector as a whole has much to learn from their experiences and developing expertise, as they contribute to improving equality, diversity and inclusion in a sector that needs to change.

The Connect Fund, managed by the Barrow Cadbury Trust in partnership with Access – the Foundation for Social Investment, aims to make social investment work better for a wider range of charities and social enterprises.

Niamh Goggin is Director at Small Change and Connect Fund’s Evaluation and Learning Partner.

[1] Diversity in the social investment field; S Bediako and G Rocyn Jones; Alliance Magazine Sept 2017;

[2] Black Asian and Minority Ethnic (BAME) is used when referring to research carried out using that term or to named networks. Black and Minority Community is used in all other cases.

[3] GM BAME is now the GM BASE network.

[4] Inclusive Impact: A Comprehensive View of Diversity in the Social Investment Sector; Inclusive Boards; Diversity Forum; Connect Fund; Dec 2018

This blog has been cross posted from the Connect Fund website.

The following blog was written by Plum Lomax, Principal, Impact Investing at NPC, and posted on its website.  NPC’s work with the Connect Fund sits within its increasing focus on social investment and impact investing.

All new markets take time to evolve and mature.  There are constantly new suppliers entering and leaving the field, along with waves of innovation occurring around products and services. The social investment market is no different and NPC has been observing and contributing to its development since the beginning.

We are encouraged by the growth of the social investment market. In the UK, the market was estimated to be worth over £2.3bn as of the end of 2017, an increase of 50% from 2015 and spread across 4,000 transactions[1]. But despite this growth, the market is still not fully functioning—amongst other issues, available financing options are often too expensive for charities and social enterprises (VCSEs), there are significant knowledge and capacity gaps and the market is not as diverse as it could be. This is not surprising in such early days of a market — it’s not going to be perfect from day one.

The Connect Fund was set up in 2017 to improve the social investment market in England — as a partnership between the Barrow Cadbury Trust and the Access Foundation. The fund has carefully identified its role in the ecosystem — what it can and can’t influence — and focuses specifically on strengthening the infrastructure — for example developing shared tools and resources and improving connections and linkages.

Through its provision of finance and support to social investment intermediaries, such as Key Fund or Big Issue Invest, and voluntary sector infrastructure organisations, such as Community Action Suffolk or Disability Rights UK, the Connect Fund promotes collaboration, champions impact and convenes new and existing voices.

For example, the Fund has invested in Singlify — affordable software management for the social investment sector, allowing social investment funds to better manage investment portfolios. And it has supported various regional membership organisations, such as a grant to Medway Voluntary Action to create a social investment champion programme, training local sector leaders to act as advocates and mentors for small local VCSEs wanting to explore and access social investment.

Two years after launch, with £2.2m in grants and investments disbursed to 52 projects (out of an overall £6m commitment), the Fund asked NPC to assess the delivery and progress of its programme to date, hear from grantees on what is working well and understand how it could maximise its impact over the lifetime of the fund. It’s too early for a systematic evaluation of the Fund, but we have published an interim learning report .

Although it’s early days, we found the Fund is making great progress. It is particularly valued by its grantees for its approach — flexible funding, a supportive team and encouraging collaboration and connections between grantees.

And it is contributing towards important outcomes to strengthen the market. The extent of this contribution is clearly harder to assess — what is the Connect Fund’s specific role in, for example, increasing diversity within the market or building trust between VCSEs and social investors?  But we are confident, through surveys and conversations with grantees, that the Connect Fund has played a role in the headway being made. Among other things, VCSE infrastructure organisations have greater knowledge and capacity to support their members around social investment than 18 months ago. ‘Cold spots’ of social investment have been targeted — by region, demographic and sector. And 241 new networks, collaborations or partnerships have been established through the fund.

That being said, the market still has numerous issues that need addressing, most of which relate directly to front-line VCSEs and therefore are harder for the Connect Fund to influence. But areas highlighted by grantees that fall within the Fund’s remit include making more face-to-face connections between organisations, continuing its mission to increase diversity, and working closely with investors around language, terminology and simplifying investment.

More detail on the progress made to date and remaining challenges for the Fund are highlighted within the learning report. We’re excited to see the Fund, in partnership with Access, embed these learnings in the next iteration of its funding and continue its vital role in strengthening the market.









[1] Big Society Capital (July 2018), Size of the UK Social Investment Market

The Connect Fund was created to build a better social investment market in England. A partnership between the Barrow Cadbury Trust and Access Foundation, the £3 million grant and investment fund supports social investment intermediaries and voluntary sector organisations to advance infrastructure initiatives. Reflecting the values of the social sector, the Connect Fund strives to promote collaboration, champion an impact first approach to investment, and convene new voices to help shape the future of social investment.

Two years on, what has the Connect Fund achieved?  Since its launch in June 2017, £2.2 million has been disbursed to 51 projects across nine regions in England. A further £500,000 was committed alongside the Connect Fund by external funders to match or part fund these projects. The Connect Fund has built online and face-to-face learning communities which have highly encouraging buy-in and participation. While only 20% of these projects have finished, some initial outputs and interim findings can be shared.

Connect Fund projects to date have delivered:

  • 234 new connections, collaborations and partnerships between social investment intermediaries and social sector organisations
  • 265 social sector infrastructure staff received social investment training
  • 126 peer support visits by VCSEs to learn about social investment
  • 2,000+ hours of enterprise development support delivered to VCSEs
  • 84 social investment events were held

See this data in a visual format in this short animation.  The Connect Fund uses both quantitative and qualitative evaluation methods, independently supported by NPC, to gather critical feedback on its effectiveness. An external survey has found that 59% agree there are better connections between social investment intermediaries and VCSE infrastructure organisations, and 91% strongly agreed or agreed with the statement that the Connect Fund supports collaborative working. Over one-third of respondents specifically mentioned increasing connections, networks or partnerships as a result of Connect Fund projects.

Champion voluntary sector infrastructure

Voluntary sector infrastructure organisations are building the knowledge and skills to support enterprise development and social investment. These initiatives have created an ecosystem of social sector support organisations that champion social investment and develop pathways to enterprise. Infrastructure organisations have created clusters of activity for skill development, awareness-raising, communities of practice and peer learning to advance knowledge of and engagement with social investment. The focus has been to avoid duplication by strengthening anchor institutions and linking voluntary sector infrastructure to existing resources such as Good Finance. The early foundations are being laid for a voluntary sector that is informed and engaged with social investment with the potential to underpin place-based initiatives across the regions.

Catalyse market initiatives

The Connect Fund has bridged gaps in the market by funding joint initiatives. The social investment sector is increasingly evolving to focus on blended, flexible or patient finance. In a fragmented market, the need for innovative, more inclusive and collaborative problem-solving is evident. The Connect Fund has supported projects to improve market information, open data sharing, and strengthen sector networks. As our funding evolves, we will move from a general approach, to more strategic alignment to ensure effectiveness, drive further collaboration and ensure the legacy of interventions.

As a result of Connect Fund projects, Social Enterprise UK, Women in Social Finance, UK Community Foundations, Responsible Finance, VONNE and many other regional networks like Social Enterprise East of England have been more engaged with social investment. Across multiple issues, the Connect Fund has provided the first risk finance to intermediaries and infrastructure organisations working jointly to solve challenges.

Convene new voices for social investment

A priority for the Connect Fund is to increase the diversity of voices in social investment. This means regional diversity to broaden a London-centric market, and diversity in terms of the protected characteristics of race, gender, sexual orientation, and disability, among others. In addition to funding across the 9 regions, the Connect Fund actively supported 9 diversity projects.

The Connect Fund was the sole funder of the Diversity Forum, a much-needed, timely and insightful coalition of social investment intermediaries committed to expand the diversity of investment decision-makers. In addition to its learning community events, the Connect Fund helped to convene The Gathering for 150+ social investors in Leicester. This was a co-created event for the sector, by the sector that took over one year for the Steering Group to organise, as a key means of sharing learning and driving collaboration.

What does this all add up to?

The work of the Connect Fund is not done. Local infrastructure is vitally important to place-based initiatives and social investment at a time when the market is highly fragmented. We will continue to advocate for the value of supporting social investment infrastructure. Resource to drive forward collaboration to fill gaps in the market remains essential. Challenges remain to be solved.

In partnership with Access, the Connect Fund has a role to play in championing infrastructure, promoting collaboration, convening new voices and catalysing enterprising initiatives. Let us know if you would like to be part of building these solutions.




This morning the Connect Fund was launched by the Barrow Cadbury Trust in partnership with the Access Foundation to support shared tools and initiatives that build a better social investment market. The fund will support intermediaries and infrastructure organisations to make social investment work for a wider, more diverse range of charities and social enterprises.

Social investment can be complex. At its best, a well-functioning social investment market prioritises impact and catalyses social change. The goal is to start with the beneficiary and maximise social outcomes. In reality, risk, return, and deal structures often take priority – leading to what we call a “finance first” approach. The result is that not enough charities and social enterprises access simple, affordable, repayable finance.

I have heard mixed views on the social investment market. After years of hard work to build the sector, many are discouraged. There are still many challenges. The sustainability of many funds and advisors remains uncertain. Social investment intermediaries struggle to meet the finance needs of the bulk of the social sector. Yet others are bullish about the promise of impact investing, for-profit social businesses, and developing impact funds for mainstream financial markets.

Social innovation is happening in communities all over the UK. Creative solutions to health, homelessness or housing – to name a few – are inspiring. These initiatives need funding. In the ‘new normal’, uncertainty prevails and access to grants or public resources is scarce. Social investment can be a resource for enterprise-driven charities or social enterprises to achieve mission with new revenue streams.

The social investment market has reached a turning point. Investing in social ventures, property initiatives and secured loans has worked reasonably well. But providing charities and social enterprises with low cost, unsecured, blended finance, hasn’t really taken off. The pipeline for new investments is relatively thin. Small to medium sized charities, social enterprises and community businesses form the core of the UK social sector, where real impact is generated. Can we continue to ignore the finance gap?

Social investment has come a long way since 2009 when the Barrow Cadbury Trust made its first foray into the current market. How will the sector define its next phase of development? Should the market move upstream to attract mainstream investors? A “finance first” model that requires market-level returns drives many intermediaries to move in this direction. What happens if social investment becomes disconnected from the communities where impact is created?

Social investment is only a good thing if it keeps social mission at its heart. Values like diversity, equality, social justice, and mission are critical. If we lose sight of these values in the market, where will the “social” be in social investment? The market will simply reflect the existing financial sector.

At this stage, there are more questions than answers. The immature state of the market means there are many resource and infrastructure gaps. Social enterprises need capacity building. More diverse participants with strong connections to places or sectors may be required. No doubt the solution lies in a combination of factors.

Some of these challenges can be addressed by catalysing shared resources and market infrastructure; and by testing new ways for existing voluntary sector infrastructure to engage with social investment. The Connect Fund will strive to support positive solutions to build a better social investment market through a process of consultation and collaboration, underpinned by learning.

Jessica Brown, Connect Fund Manager

14 June 2017