New Gen UK Study Tour - Day 2

By: Sally Garis, New Generation of Giving Coordinator, Philanthropy Australia.

Without doubt, the UK is a global leader in impact investing. Today was full of discussions about social finance in the UK with some of the leading organisations in this space.

Esmee Fairbairn Foundation kicked off the morning by taking a deep dive into how they put their endowment to work in order to leverage their social impact.

This was followed by a conversation with Danyal Sattar. Danyal has led the development of many social investment funds and strategies for some of the UK’s top foundations. Fellow Australian, Simon Rowell, then shared the work of Big Society Capital - an independent financial institution set up with the mandate to grow the social investment market in the UK.  

We also visited Bridges Ventures and Social Finance UK to explore all the different types of impact investments that have taken place in the UK across sectors and asset classes, including a focus on outcomes based funding (social impact bonds).

Key takeaways from Day 2

Impact investment can be a complement to philanthropy, rather than a replacement. There will always be a role for philanthropy. Philanthropy can play a leading role in the support and growth of impact investment through:

  • Providing seed capital to support new ideas and innovations to become investment ready
  • Making impact investments from the foundations' corpus to amplify the social impact of the foundation
  • Funding impact investment infrastructure and market - building to support the growth and maturation of the sector in Australia
  • Start by just giving it a go - you can develop the impact investment policies and strategies as you go!

Case study: Esmee Fairbairn Foundation

The Esmee Fairbairn Foundation (EFF) is one of the largest independent grant makers in the UK. In addition, EFF is a pioneer in social investment. They grant in the areas of arts, youth, environment, social change and food.  

However, their approach to granting is unique - instead of funding specific programs, their funding aligns with their theory of change. They back exceptional people and organisations to unlock and enable potential; they back the unorthodox and unfashionable; they build collective networks through public engagement and collaboration; they catalyse systems change through long-term funding or support for the sector itself.  

In 2008, EFF founded a social investment fund with a target commitment level of £35 million to invest in not-for-profits, social enterprises and intermediaries that are redesigning and challenging existing business, finance and service delivery models. 

To date, they have made close to 70 investments of an average investment size of £390 000 and an average term of seven years. EFF has made investments across a range of asset classes and investment mechanisms:

  • Direct investments into NFPS And social enterprises (often to organisations they have an existing grant relationship with) e.g. Ethical Property
  • Indirect investments into intermediary finds e.g. Bridges social entrepreneurs fund
  • Market building investments into organisations and the development of products that help build the market e.g. Social Finance UK
  • Land purchase facilities with conservation organisations and arts transfer facilities to transfer productions from the subsidised arts sector to the commercial sector.

New Gen UK Study Tour »

Nov. 04, 2015

 Tags: new generation of giving, new gen philanthropy

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