Barnwood is committed to making social investments in Gloucestershire. What are social investments and how can they further our work to make positive change?

Barnwood is committed to making social investments, in support of the Trust’s charitable purpose. This means using Barnwood Trust’s financial resources to provide repayable finance to charities and social enterprises to help increase their social impact. In this blog, we explain social investments and what we hope to offer at Barnwood Trust.

Funds available for social investment

In early 2020, Barnwood received planning permission to develop new accessible housing on its Manor Gardens estate. Then the pandemic happened, and the disproportionate impact of the pandemic on disabled people and people with mental health conditions meant that we needed to focus our resources on our core activities. As such, the Board making the decision to sell Manor Gardens.

Manor Gardens had been a charitable asset for many years and Trustees were keen to reinvest the proceeds back into the county in a long-term manner. The proceeds were ring-fenced to make social investments in Gloucestershire which supported Barnwood’s vision and enabled other charities and social enterprises to further their social impact. £3.5 million has therefore been ring-fenced for social investment.

What is social investment?

Having made the decision to be a social investor, we needed to learn about social investing, as this was a completely new type of investment for Barnwood. What was it? What would it mean for Barnwood?

We have defined social investment as an investment which involves both:

• the use of money or property which supports the Trust’s purpose to act as an agent of social change, working alongside disabled people and people with mental health conditions to create that change, and
• making a financial return for the Trust.

Dipping our toe into social investing

To support our learning about social investments, we have been attending national learning events and meeting with national charitable foundations that have been making social investments for many years. Through these meetings and events, we have heard about different approaches to social investment, ways of interpreting an organisation’s charitable purpose, what this means for investment, and how organisations evaluate the performance of an investment. We have gathered valuable resources and insights from others who are already far along on their social investment journey. This means we don’t have to reinvent the wheel.

Through our existing relationships in the county, we identified a local social enterprise[1] looking for investment. We are now working with them to trial our first social investment, using a ‘test and learn’ approach to see what works. Through the experience we are providing mutual support to achieve our agreed social and financial outcomes which support each of our organisations’ charitable purposes.

This first social investment was made in September 2023 to The Great Plate, a social enterprise based in Aston Down in Gloucestershire, over a 10-year investment term. The Great Plate wants to improve the quality and impact of school meals across communities and develop healthy eating habits for life. Barnwood’s investment has provided working capital to enable the social enterprise to grow, and capital expenditure to develop a ‘dark kitchen’[2]. This kitchen is intended to support employment opportunities by removing barriers to employment for disabled people and people with mental health conditions.

Our learning so far

Through this learning, we are now in a position to start articulating what our social investment framework is and this work will continue until the end of 2024. The framework will enable us to be transparent about the following:

• how social investments will contribute to Barnwood’s charitable purpose and financial position;
• what funds are available for investment;
• what the eligibility criteria for social investment are (i.e., required organisational structure);
• what we will and will not invest in (i.e., type of investment, themes for investments etc.);
• what our expected returns and outcomes are, both financial and social;
• what our minimum and maximum investment is; and
• what timeframe we are happy to invest for.

Social investments will be a significant investment in the county for us, so we are taking time to ensure we are clear about what our social investment offer for Gloucestershire will be.

New relationships and approaches

Social investment is different to funding because we expect a financial return from the investment. As such, we need to understand the risks involved and establish new and different relationships and approaches with organisations receiving the social investment. We will need to manage our own liquidity and cashflow requirements differently as we aim to support and work alongside our investees and provide flexibility; this means we will need to have open and honest conversations with them to ensure expectations are managed on both sides.

We believe that there are some exciting social investment opportunities in Gloucestershire, although we also recognise that our charitable purpose and a small geography will bring challenges in identifying the right social investment to create the change disabled people and people with mental health conditions want. We will continue on our learning journey for the remainder of 2024 and hope to be able to share more in 2025.

[1] A ‘social enterprise’ uses commercial tactics to make social improvements or to benefit the community.

[2] A ‘dark kitchen’ is a fully equipped commercial kitchen where food is produced exclusively for delivery and does not have dining areas or customer seating.