Creating inclusive social investment

20 April 2018

Richard Thickpenny, Business Development Manager of ACH, reveals how work with Resonance – one of the UK’s leading social investment firms – led to the development of an investment product which will help Black, Asian and minority ethic (BAME) organisations meet the needs of their beneficiaries, whilst ensuring they maintain control over the direction of their organisation.

BAME organisations can often struggle to obtain funds or find the right investment model because they are either not ready to take on investment or the market is not ready to understand and invest in them.  Fortunately, through a mix of Big Potential funded consultancy with Resonance, an understanding group of social investors, and a great deal of tenacity all round, ACH overcame its own funding obstacles and is now a rapidly growing organisation.  

To begin with, ACH operated on a leasehold model, renting all properties from local landlords. This ensured demand was met, while helping the local community. However, the aim for ACH was always to move into a freehold model. In doing so, ACH would gain more control over its own organisational direction. By growing as an organisation, we would be able to meet the greater needs of our tenants, who seek safety and job security in their quest for independence. 

This came at a crucial time in UK housing, with rents on the rise and public sentiment towards refugees and asylum seekers having turned sour, which resulted in landlords becoming less likely to hand over their properties to us. These landlords were faced with an economic conflict; choose to sell their property or rent it out to occupants who were able to pay the increased rent prices. The instability caused by landlords taking back their properties led to our pool of available landlords shifting. We were now attracting landlords who wanted their properties used to contribute to social impact rather than economic gain.

Ensuring we have constant and immediate access to accommodation for our tenants continues to be an integral part of what ACH stands for, making access to accommodation a central part of our business model. It allows us to deliver our services and immediately assist the people who come to us. By having access to more funding, we as an organisation are able to purchase homes that remain in our possession, meet the demands of our tenants and gain further autonomy over our organisational direction.

To ensure we have this access to funding, ACH and Resonance created the Yield Sharing Investment Model. This non-interest-bearing investment model exists in a unique capacity, being both fair and ethical. It can be certificated to comply with Islamic Law, whilst providing a return to investors including those who come from other faith backgrounds or none. The model creates a balanced relationship, wherein the power that once existed between an investor and investee becomes co-operative instead of potentially exploitative. The investors benefit from the investee making a profit, as their investment is directly tied to the success of the investee’s mission. This in turn makes ACH a personal investment, for those seeking to create a greater social impact and have an investment yielding a financial return on a fair and equal basis.

“It’s been an enormous privilege to work with ACH – a team whose authenticity shines through. They know what they want to achieve and are quick-thinking enough to balance this to attract social investment. Together with the first investors, the hard work on Yield Sharing has been done. It will be much easier for the next wave of investees to use, thanks to ACH.”

Jari Moate, Investment Manager, Resonance.

Our investors choose our organisation because they believe in our #rethinkingrefugee social campaign to transform the lives of refugees, one of the most vulnerable groups of people in our society. Both our investors and the landlords that choose to work with us grasp the far reaching impact and difference their social investment will make. Through our Yield Sharing Investment Model, we are able to place the needs of our tenants first, while part of our agreement with investors is to report to them on a regular basis. This can range from daily operations of the organisation to the success stories that our investors have made possible.

Through this work, ACH can act as a role model for other BAME organisations. We are an example of an organisation that has played to their strengths, and have taken the initiative in creating opportunities. The Yield Sharing Investment Model was developed over a three-year span, and with Resonance’s help we have stuck to our values throughout. This has ensured ACH stands out in the new and emerging market that is social investment. By securing access to accommodation, ACH is not only able to offer more of our services, we are also able to maintain constant contact and offer our support. It is vital that other BAME organisations stay true to their mission and goals, in the same ways that ACH has done. It is the best way we have to maximise our social impact and contribute to lasting and successful change in our world.

ACH, Social Investment Business and Resonance will host a Yield Sharing investment discussion event in London on 2nd May (11:00am - 13:00pm) - . Please contact chris.mcbride@sibgroup.org.uk if you would like to attend and find out more.

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The Social Investment Business is the trading name for the Social Investment Business Foundation, Registered Company No. 05777484 (England), Registered Charity No 1117185 (England & Wales), The Social Investment Business Limited, Registered in England No. 06490609, VAT No. 927456693 and Futurebuilders-England Limited, Registered in England No. 05066676. Registered Office: CAN Mezzanine, Borough, 7-14 Great Dover Street, London, SE1 4YR

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