Only 11 of 221 charity recipients of £6.6m of Big Lottery Fund grants to help charities access social investment have secured investment deals, worth £2.8m, in the first three years.
An initial review of the programme says that it is "unfair" to judge the programme solely on its investment results so far, and that the programme has had many other positive impacts.
The Big Lottery Fund launched the Big Potential Breakthrough (BPB) fund with £10m of National Lottery funding in February 2014 to make grants of between £25,000 and £75,000 to enable charities to carry out “in-depth investment readiness work”.
The scheme closed to new applicants in September 2017 and Social Investment Business (SIB), which manages the programme, has since published an evaluation report assessing the BPB fund’s performance up until February 2017.
In this time, the fund issued £6.6m-worth of grants to 221 charities, 11 of which secured a combined 17 social investment deals, worth £2.8m.
Some 208 grant applications were rejected in that time and 14 were awaiting a decision for funding to be awarded.
The review paper says: “As the research progresses, it is becoming increasingly clear that the journey to investment readiness for voluntary, community and social enterprise (VCSE) organisations at the micro or small SME segment of the market is longer than anticipated (perhaps at least two years’ post-grant award).
“Therefore, even at the end of year three, it remains unfair to assess the impact of BPB based upon just the social investment deals secured to date.
“Indeed, the wider interview data reveals that many VCSEs are leveraging in additional finance post-BPB to drive growth and scale, it is just that this is often not social investment.”
The majority of the funding - £4.89m - was awarded through 182 "preliminary grants" at an average of £26,852 per grant.
The remaining £1.71m was awarded through 39 "investment plan grants" for more advanced charities at an average of £44,006 per grant. All the investment deals were secured by the charities awarded investment plan grants.
An SIB spokesman told Civil Society News that more investment has been raised by grant recipients since February last year.
He added: “Most importantly, this evaluation demonstrates that the programme has delivered a wide range of positive outcomes for the grant recipients - developing new and existing trading activities, investigating expansion and diversification, and strengthening governance and financial management.
"All of this helps organisations build their resilience and wider sustainability.”
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