Investment Readiness Roundtable – Discussion Paper

Investment Readiness Roundtable – Discussion Paper
The Big Lottery (Scotland)

Social investment – i.e. investment activity which has an expectation of both a specified social outcome and / or an explicit financial return – continues to be an emerging field that is of interest to government, grant-makers, philanthropists and the third sector in Scotland.

BIG achieves its mission primarily through grant funding and we believe that social investment is not right for every organisation. However, we recognise that there are specific circumstances where investment provides third sector organisations with a more appropriate path to sustainability. BIG also recognises that promoting the sustainability of these organisations, reducing their reliance on grant funding and encouraging them to be ‘masters of their own services’ allows for grant funding to be directed to those organisations whose area of work will never have a reliable income stream.

Our overarching goal is to determine the way in which social investment can help the third sector deliver our outcomes. More specifically, we want to support the development and growth of organisations with a revenue generating model (and the potential to diversify their income streams) to enable them to have more social impact.

BIG’s Scotland Committee agreed officers would engage with stakeholders specifically to pursue the proposals for supporting social investment in Scotland. These proposals were formed around 4 themes
•  Stimulating the pipeline of investible ideas
•  A pilot to look at Supporting investment readiness
•  Supporting new models of community investment
•  Investing in research

During this round table discussion we are looking to explore some of the challenges organisations face when seeking social investment and ways in which BIG could fill the gaps in support organisations require to make the move from grant funding to social investment.

We have invited a range of organisations, in terms of size, age and turnover but who all have, in our estimation, have an element of enterprise in what they do.

Areas we are looking to explore are
•  The vital ingredients to making an organisation more enterprising
•  What makes an third sector organisation competitive
•  What do you need funding for
   o Delivering core services
   o Expansion/development
   o Bridge funding
•  There is plenty generic business support available (for instance BIG has its SIB contract in place to improve business practice in the sector). We are looking to explore the “extras” required to secure social investment. We have some ideas which we will explore but are very interested in exploring other areas of support which you have identified
   o Detailed / more specific support
   o Bespoke 1:1 intervention
   o Mentoring approach – over an extended period. Equity funders are generally offering 7 – 10 rounds of funding and are not anticipating exiting for about 10 years
•  For those who have been successful in securing investment, or for those still on the journey
   o What organisational drivers are there to seek investment
   o What changes did / does your organisation have to make to achieve investment
   o What assistance would have helped