What makes a social investor different? To start, social investors want to make investments that have both a social and financial return. In fact, many of the organisations making social investments are social businesses themselves.
We're very pleased to share that 80% of the social investors and advisers listed in our directory are also charities, social enterprises or Certified B Corps.
To celebrate Social Enterprise Day, we met with 3 social investors to find out more about managing funds in the social impact investment space.
Jaishree Mistry, Seva Phillips and James Horne all made the leap from commercial finance to the social sector. All three work for organisations that started as charities before they created an investment fund. Here's what they said about why they do (& love) their work:
Being a social impact investor
We caught up with Jaishree Mistry, Investment Manager at Homeless Link, at Good Finance Live. We catch her on her lunch-break for a quick chat to find out how and why she became a social investor.
I actually started my career in commercial banking. I was working in corporate banking when I was seconded to the Prince’s Trust to work on the business start-up programme. After being placed with the Prince’s Trust, and seeing the positive impact finance can make, I decided to continue working in social investment. It’s hugely motivating that I can use my finance skills to make a real difference to people’s lives.
For Jaishree, money is ‘energy’ that can be challenged for good. Social investment allows money to be used over and over again, allowing greater impact to be achieved.
Homeless Link is the national membership charity for organisations working directly with people who become homeless in England. Jaishree explained that Homeless Link’s jump from charity to investor could be seen as quite a surprise to the sector. But when their research found that many sector organisations were nervous about taking repayable finance, they decided to run a social investment fund. In fact, a highlight of Jaishree’s role was supporting a long-established charity embark on its second application to repayable finance through Homeless Link.
I can do a job that chimes with my own personal values - it’s not just a way to earn a living but much more than that.
Nesta has been involved in social investment for a while now in various forms. But they only branched into arts and culture in 2015. Seva joined when they launched their Arts Impact Fund in partnership with Arts Council England, Bank of America Merrill Lynch and the Esmée Fairbairn Foundation. Seva is responsible for Nesta’s investment work in arts, culture and creative industries. We were interested to know what motivates him in his role.
I started my career in financial services at EY, working in corporate tax. Whilst it was invaluable experience, I wanted to do something that helped communities, which is how I’ve found myself in the social investment sector for the last 7 years – during this time I’ve also worked for The Young Foundation and CAF Venturesome.
There’s a recurring theme that people want money to connect with social causes and they want their career to connect them to a satisfying life. This we’d expected, but the question that’s always on my mind is why do they invest their time on a specific cause? Chatting with Seva, we want to get away from finance to talk about the thing that inspires him most.
I love music. I go to gigs of all kinds from electronic to indie music - seeing Vampire Weekend at EartH, one of the Arts Impact Fund’s investees, was one of my live music highlights of the year.
[Arts & culture offers us] a way to relax and unwind, and opportunities to be inspired abd get involved in changing the world around us. The arts are also a way of developing a greater pride of place and building bridges between communities.
Side note: we’ve cut the quote a lot, Seva is definitely very passionate about their work.
When asked about one of the highlights of their role, Seva was quick to jump in to share a story of an organisation they’re helping. The Arts Impact Fund invested in a small arts venue - Fuse - in Bradford, which runs outreach projects in the community and has a gallery and exhibition space. They made an investment for the team behind this to set up an artist residency programme in the South of France, known as CAMP. If CAMP is successful, it will subsidise Fuse’s artistic activities in Bradford.
So these guys found a dilapidated farmhouse, they did it up and turned it into a residential arts camp. From sound design to script writing to acting they have it going on there. And these courses are delivered by people at the top of their game, so that’s pretty cool!
After 35 years in retail, private and business banking, James moved to the social sector to work for Kent Community Foundation. This, he says, opened his eyes to the many charities and good causes that 'truly care and make such a positive impact' to people living in Kent and Medway. So what is it that makes being a social investor so rewarding?
The financial packages we arrange can be a real lifeline to many of the organisations and I know my experience and support is recognised and valued by those who apply.
James lives in Kent, the area the funds work to support, and travels the county playing cricket in the summer months. So it was comforting to hear him say the biggest reward from his work is being able to see first-hand what a significant impact their funds are making in the area.
We were surprised and motivated by the excitement of all investors around the impact their funds are helping deliver. A feeling which we feel James reciprocates,
Having worked in the corporate world for so long, I have really enjoyed my move into the charitable sector.
Before we let them get back to their important work of managing investment portfolios, we wanted to get some final comments:
There is nothing as inspiring for myself or the team than seeing what a significant impact funding from Kent Community Foundation makes to the organisations and their beneficiaries.
Jaishree says the most important thing to remember when running a charity or social enterprise is that ‘cash is king’. It’s essential there is sufficient working capital to undertake your organisation’s activities.
Without control over the cash, the organisation cannot continue to operate successfully.
And Seva dived right in there with a bit of career advice:
I think this is a really great sector to work in for anybody who’s worked in finance or with any sort of technical skills. I’d really encourage people to volunteer or learn more about both the arts and culture industries and social sector more widely. Ask questions, take advantage of the openness of people within the space!
If you're new to social investment, or you're interested to learn a little bit more about their motivations, we hope this blog has helped.
Happy Social Enterprise Day 2019!
To learn about 80 social investors, go to the free online directory.