The UK’s 100,000 social enterprises employ two million people and contribute £60 billion to the UK economy, while creating social impact through providing public services, as well as health and community support.
However, social enterprises, charities as well as small and medium-sized businesses (SMEs) that play a vital role in the economy and serve communities all over the country, need access to finance in order to continue to deliver and grow their social impact and build resilience.
Government and organisations supported by the government have been utilising various tools to improve the financing of this important sector and leverage in additional resources alongside their own, with the three most prominent tools employed being a mixture of grants blended with investment capital, guarantees and tax reliefs.
Together with Big Society Capital and funded by the Department for Digital, Culture, Media and Sport, we considered the effectiveness of these grant, guarantee and tax relief subsidy approaches in the UK as part of a report “Bridging capital into communities: A practical guide for policy makers.” The report also looks at the use of these tools internationally, where they have the potential to grow the social impact investment market, attracting more capital and supporting the resilience, sustainability and impact of the enterprises.