This blog summarises what Barking & Dagenham Giving’s Steering Group did in their third workshop where we learned how we might source deals for the Endowment Fund.
In the third workshop of the
Community Steering Group
(CSG) we covered a lot! We learnt about potential deals for the Community Endowment Fund from Lara Norris and Chris Woods from Curiosity Society, and heard from
social investment
expert, Danny Wilson-Dodd.
Read about workshops 1 and 2, then hear CSG member Wunmi’s thoughts in a short video recorded immediately after the workshop:
Community Steering Group (CSG)
A group of local people who give their time and ideas to make Barking & Dagenham Giving’s community-led investment fund a success, now and for future generations.
Social InvestmentIs the use of repayable finance to help an organisation achieve social impact. The investment can take various forms, commonly a loan, or debt type form with interest, and is often used to develop new or existing activities that generate income. The requirement to finance a loan usually means that the investment should not be used as a substitute for a revenue stream; if an organisation is not trading it may not have a way of repaying the money and therefore should not consider taking on social investment.
What happened in workshop 3
The following blog summarises some of what we learnt, and the questions and ideas members raised.
When we talk about ‘deals’ in the context of the Community Endowment Fund, we are referring to both the investments made with the Endowment, as well as opportunities to spend any returns it makes. By way of introduction to the concept of investment, Lara talked about how we all source deals in our everyday life. We’d use the same principles if our sink springs a leak and need to find a plumber; you try and source the best deal for your needs via friends, social media, public sources of ‘trusted traders’, or professional networks and institutions, then you make a decision based on your priorities (budget, values, convenience).
Those same processes can be used to help guide the CSG through the development of an ‘
investment policy
’, and help the group tease out their appetite for different approaches to investment.
Investment Policy
A strategic document that outlines how an organisation will manage their investment assets (the “Portfolio”), with often a set of financial (and sometimes impact) objectives and boundaries.
How do we source investment deals?
Chris carefully explained how we differentiate between sourcing deals ‘upstream’ (i.e. where we’ll invest the Endowment (and ‘downstream’ (grants or investments we’ll make with the returns from the Endowment). Both up and downstream should be close as possible to our values as explored in workshops 1 and 2 but finding things to invest in on either side of the Endowment involves different work. As Chris explained:
- a perfect investment should be low
risk, high impact
Risk
When you invest money there is always a chance that you won’t get the return you expected. Weighing that up is important before investing., high returnImpact Means the changes to the world we expect to see because of an investment. This could be numbers of people helped, the amount of change or the creation of things that make the world better. This is not exclusive to investment or finance.and easy to move about (this is referred to as ‘ liquidityReturn The amount of money you expect to get back from an investment, usually as a percentage gained over a set period of time.’)
Liquidity
How fast you can get your money back from an investment without paying a fine for taking it back - our
grantsdon’t need to be low risk or give a high return and almost definitionally never need to be moved about.GrantA gift of money with no expectation of paying it back. Sometimes, there are certain ‘conditions’ or requirements attached to the money. In other cases, there are not.
CSG taking the driving seat
At every step of our journey, we can also talk to people who’ve done this sort of thing before. That includes our guest speaker, Danny Wilson-Dodd, an experienced
social investor
Social Investor
Asset owners, such as donors and foundations, who invest their money with the goal of achieving specific social objectives rather than earning a profit.
and former Deputy Chief Executive of Big Issue Invest, the social investment arm of the Big Issue magazine. Danny shared his experiences of investing and gave a real-life example of the challenges and impact our investments might face.
Social Investor
Asset owners, such as donors and foundations, who invest their money with the goal of achieving specific social objectives rather than earning a profit.As Danny said:
“Social investing has been around for a long time and there is a lot we can learn from others but the challenge and excitement of the Barking & Dagenham Endowment Fund is in putting community members in the driving seat of investment in such a holistic way.”
CSG members demonstrated this through the workshop with their ideas, such as:
“A return does not only come as a financial return, it can be in different forms.”
“Advanced groundwork and … relationship building being key.”
“The best deals come in different shapes and sizes. We would have to iterate to find the best one.”
“The importance of learning from other organisations.”
And a question: “Will we only ever be investing the returns from the
Endowment
EndowmentA legal structure for managing a financial investment. Often in the form of a donation to a non-profit organisation, such as a charity or university, which uses the income it generates for good work.
into the community?”
We don’t have an answer for that question right now; the CSG’s role is to work with BD Giving’s trustees to carefully consider how they want to balance risk and return. The emerging sense of ownership reflected in these ideas and questions though, is exactly what we hoped to see from CSG members. We’re excited to see where this energy takes us next!
EndowmentA legal structure for managing a financial investment. Often in the form of a donation to a non-profit organisation, such as a charity or university, which uses the income it generates for good work.What’s next for the CSG?
We rounded up by thinking about the next steps and how we might learn from others. The group have been asked to research potential deals to build on the list of public sources before Workshop 4, which takes place on 24th February 2022. In workshop 4 we’ll be thinking about how we map our attitude to risk and return.
If you would like to find out more about the CSG or the Community Endowment Fund you can contact Cameron Bray at hello@bdgiving.org.uk or sign up for our newsletter to stay in the loop with all our work in the borough.
