What is the background to the Trust’s involvement in social investment?
As with many charitable trusts the Barrow Cadbury Trust has traditionally used its endowment to invest in mainstream investments, albeit with an ethical dimension, and has used the income generated to fund our work. In 2010 the trustees decided to use part of the endowment to further the aims of the Trust through investments in charities and social enterprises, aiming to achieve both a social and a financial return with the funds. Since 2010 Barrow Cadbury Trust has allocated £5.7 million to 29 different social investments.
What is the Trust’s approach to Social investment?
The Trust’s aim is both to develop the social investment market and to promote social justice through its social investments. In developing the market the Trust will promote its values, including sharing its expertise in areas such as measuring social impact.
Why social investment?
- The Trust has the opportunity to use all its assets to further its aims.
- Social investment provides an additional source of finance for charities and social enterprises, in particular providing the risk capital for the development and growth of their work.
- Social investment can bring a greater discipline to the working of charities and promote financial sustainability.
- The Trust can achieve a social impact while recycling its funds.
- The Trust can add social value to the process of investing.
- The Trust can encourage a more responsible form of capitalism through the development of the social investment market.
- Social investment can help protect previous grant finance for activities which cannot make a surplus.
The Trust is moving away from some of the models which have been ‘proved’ and have become more ‘investable’, such as funds, social impact bonds (SIBs) and charity bonds. There may still be particular SIBs, funds or bonds in which the Trust has an interest, due to their geography or activity, but they are not in themselves of specific interest to the Trust.
The Trust recognises that some organisations are at an early stage in relation to social investment and need support before they become ‘investor-ready’. The establishment of the Connect Fund in June 2017 is enabling the Trust to create an environment in line with our mission, including working with other organisations and on occasion using grant funding where appropriate.