Caroline Tulloch, Investment Manager at Bridges Ventures, explains why this social investor has joined with others to acquire properties for the Peer Landlord project
Can you create innovative solutions to social problems that can change the status quo and improve services to some of the most disadvantaged? And can you finance these solutions in such a way as to be genuinely sustainable, facilitating replication and wider-scale take-up and driving systemic change?
The belief that you can forms one of the key tenets of social investment: that sustainable social financing solutions enable sustainable social business models to scale, reaching more beneficiaries and inspiring wider scale adoption of the model.
Bridges established the Social Entrepreneurs Fund in 2009 with this in mind. Our own investors (including the Office of Civil Society, Esmée Fairbairn Foundation and J.P.Morgan’s Social Finance unit as well as our own Bridges Charitable Trust) are united by the belief that social enterprises delivering high social impact with a financially sustainable model can be an effective tool for change – and can help leverage increasingly scarce philanthropic resources.
The Peer Landlord project run by Commonweal is a perfect example. With social housing shortages reaching record highs and the cost of providing essential services to those in traditional supported housing models escalating, local authorities and charities, such as Thames Reach and Catch22, which provide services to vulnerable individuals with high support needs, are keen to see more effective solutions to help individuals transition to independent living.
For those previously homeless, there is currently little ‘move-on’ accommodation in the gap between high intervention, high cost supported accommodation, and fully independent housing. The Peer Landlord model seeks to test a new model for intervention that uses peer support to reinforce positive influences and support positive social outcomes in a more cost-effective way than existing provision. The model offers deep impact for the individuals directly supported, and the potential to drive market-level change by developing a best-practice blueprint that can be replicated.
Alongside the Esmée Fairbairn Foundation and Trust for London, we have committed a combined £1.5m to acquire the properties used for the project. It has been a great opportunity to work with two of the more forward-thinking foundations operating in the impact investment space, and an exciting example of collaboration supporting innovation.
Before making the commitment, Bridges and the other social investors looked closely at the business model as well as the social impact. This is not grant funding and we do expect a financial return; less perhaps than could be achieved with more mainstream investments, but a vital part nevertheless of the package. The scrutiny of the business model we believe is helpful too for those seeking investment – helping to review assumptions and costing; seeking to ensure robustness, resilience and longer term sustainability.
Commonweal’s commitment to action research adds a different dimension to ‘success’: the model which delivers the greatest impact to tenants may evolve from the model in place at the moment, but all stakeholders are committed to working to deliver the goal of independent, shared living as effectively as possible. An unusual position for an investor used to searching for clear evidence that the model in which they are investing ‘works’ – but a compelling investment opportunity for a pilot fund aiming to support pioneering methods of delivering exceptional social outcomes.