In the wake of the results of the Investment and Contract Readiness Fund, announced yesterday, Seb Elsworth of the newly-formed Access Foundation, outlines how his organisation will build on the lessons learned.

Yesterday saw an announcement that the Investment and Contract Readiness Fund, a fund set up by government and administered by the Social Investment Business, has proved very successful. For every £1 it gave in grants to organisations, they generated £18 in contracts and investment.

My own organisation – Access, the Foundation for Social Investment – has a great interest in the work of the ICRF. I would guess that the success of the ICRF was a significant factor in encouraging the cabinet office, via Access, to commit further money to help charities and social enterprises access investment.
 
We have been given £60m to spend over the next ten years, and this will fund programmes which similarly seek to build the capacity of charities and social enterprises to engage with social investment.

We will also broaden the reach of this sort of support beyond just those seeking to raise the largest sums, helping to bridge the gap between smaller charities and social enterprises and the world of social investment. 18 to 1 is a tough act to follow, though!

Now I must declare an interest. I used to work at the Social Investment Business and was closely involved in the development of the ICRF and successor investment readiness programmes including Big Potential. Having been there at the start means that I am all the more interested to read the latest evaluation of the programme from Ecorys, and consider the lessons on which Access can draw as we develop our thinking during our consultation phase.

So what struck me most reading the evaluation?

Firstly, the figures around contract readiness seem to be much higher than those around investment readiness (roughly double the amount). Charities have been winning public service contracts for many years and so it is perhaps no surprise that this figure is higher. However, I would caution against drawing too much of a distinction here. One of the biggest concerns of social investors is whether the organisation they are seeking to support has a revenue model. Success in winning contract will therefor likely have a big impact on how investment ready an organisation is.

Secondly, the fact that the majority of ventures supported felt that the support had provided a long term and sustainable impact should be celebrated. The focus on getting a transaction over the line, be it an investment or a contract, sometimes led to the impression that the ICRF wasn’t able to provide effective knowledge transfer. This seems to be proven wrong.

Thirdly, the evidence also suggests that the fund has helped to drive up the quality of advice and support which is being provided to the sector. This is essential at a time when the sector is facing such serious challenges to its traditional funding models and rising demand. This improvement of quality of support also presents opportunities outside of these dedicated investment readiness funds.

At Access we are in the process of consulting on the design of our capacity building programme, and in particular the priorities for the coming year (details on our website). While we have a much broader brief than the ICRF – seeking to support organisations of a range of sizes - there are some clear lessons from the ICRF which we must consider, and use to stimulate debate during our consultation.

I am worried about the lower number of applications on the right hand side of the country, in the East, East Midlands and North East. We must address this.

The demand led model of the ICRF has clearly allowed for organisations to tailor their support to their specific needs, and no doubt helped to maximise the impact of the fund. This is powerful, but also expensive. We are very interested in hearing about the balance between this demand led one-to-one support and the wider impact that one-to-many or peer to peer interventions can deliver, especially for organisations at an early stage of their journey towards investment.

Similarly, while the case for contributions from ventures is strong for those organisations which are seeking to raise relatively large amounts, it may not be so strong for those seeking to raise smaller amounts, or for those at an earlier stage of their journey.

We are also very mindful of the fact that the Big Potential programme is there to support many organisations seeking to raise investment and therefore we will complement the role that Big Potential plays over the coming years.

To find out more about Access and our consultation on capacity building please visit our website.