A social investor set up over a decade ago has been successful in helping more sector organisations access financial support, according to a new review, which warns that the wider social investment market “remains fragile”.
Today, the Oversight Trust published a review into Access - The Foundation for Social Investment, which assesses whether the charity has met its objectives and been effective in its operations.
Set up by the Cabinet Office, National Lottery Community Fund and Better Society Capital, Access was established in 2015 to address business capacity gaps preventing sector organisations from accessing the investment needed to grow their impact.
The Oversight Trust’s report finds that Access has been successful in building and sustaining the social investment market, strengthening intermediaries, developing place-based approaches and improving community organisations’ resilience.
Since its inception, Access has helped to deploy £180m-worth of investment to 3,552 voluntary, community and social enterprises across programmes, “transforming the supply of small-scale, patient finance”, the report says.
‘Exemplar of market-building in social investment’
The report finds that 24% of Access’s investments are in the country’s 10% most deprived areas, “reaching communities not otherwise funded by traditional funders and foundations” and helping charities and social enterprises access new markets.
According to the report, in 2011, 44% of social enterprises cited access to debt or equity as their biggest challenge but this fell to 6% by 2021.
The report says Access helped create “a clear front door”, citing the over 700,000 people who have used Good Finance, a collaborative project to help improve access to information on social investment for charities and social enterprises.
It says the platform has become a “trusted and accessible resource for charities and social enterprises navigating a complex funding landscape”.
“Access has created more ways for charities and social enterprises to access the finance they need, with partners who really understand the markets they are working in and the impact they are creating,” it says.
“Its Flexible Finance programme has delivered 3.5 times more investment to Black and ethnically minoritised-led organisations than other Access programmes.”
It adds that Access has become “an exemplar of market-building in social investment, which has been drawn on in many countries around the world”, including Australia and Canada.
Social investment ecosystem ‘remains fragile’
However, the report warns that “the social investment ecosystem remains fragile despite continued subsidy, currently largely via Access, and despite the overwhelming social benefits delivered by social enterprises”.
“It’s possible to see the path whereby individual intermediaries and individual charities and social enterprises become self-sustaining, but the social enterprise ecosystem requires ongoing subsidy,” it says.
It adds that since 2022, impact investment has shifted towards commercial impact-fund managers and away from social intermediaries.
As dormant assets allocations have been delayed and fallen short, the report asks whether other sources of capital for social enterprises can replace Access’s support or dormant assets funding.
“Dormant assets have been an important catalyst, enabling Access to perform this role and, if reduced, would likely diminish this catalytic activity in the marketplace of funders,” it says.
‘Mobilising new sources of capital will rely on collective action’
Seb Elsworth, chief executive of Access, said: “We welcome the findings of the independent review, which recognises the progress made over the past decade to strengthen the social investment market and ensure that smaller charities and social enterprises can access the finance and support they need.
“The review rightly highlights both the impact that blended finance has had, and the continued fragility of the ecosystem we operate in.
“Access was created to serve organisations working in the most disadvantaged communities, and we’re proud to see the reach and resilience that has been achieved through our partnerships with investors and intermediaries across the country.
“Looking ahead, meeting the challenges of mobilising new sources of capital and supporting long-term sustainability will rely on collective action, where Access continues to play an active role alongside our partners.
“We’re grateful to the Oversight Trust for its scrutiny and stewardship, and we remain committed to ensuring that Access continues to evolve, respond to the needs of charities and social enterprises, and help shape a more resilient, inclusive social investment market for the future.”
