Explore the world of social investment for charities with Seb Elsworth MBE, CEO, ACCESS The Foundation for Social Investment.


Seb covers the history of ACCESS and progress to date over the last 10 years before exploring what an ideal investment ecosystem for charities can look like, what enterprise-based resilience for charities is, and how to become a social investor as an existing charity. 


Learn more about the speaker, access a transcript and discover other sessions from our Charities Conference below. 

Explore the world of social investment for charities with Seb Elsworth MBE, CEO, ACCESS The Foundation for Social Investment.


Seb covers the history of ACCESS and progress to date over the last 10 years before exploring what an ideal investment ecosystem for charities can look like, what enterprise-based resilience for charities is, and how to become a social investor as an existing charity. 


Learn more about the speaker, access a transcript and discover other sessions from our Charities Conference below. 



About the speaker

Seb Elsworth MBE
CEO, Access - The Foundation for Social Investment

Seb was the founding CEO of Access - The Foundation for Social Investment and has led the organisation since its inception in 2015. As CEO Seb has overseen the significant impact of the Foundation, working in close partnership with a range of organisations, to increase access to finance for community based charities and social enterprise right around England. Seb is widely recognised as a collaborative leader and advocate for enterprise development and social investment across the sector.

Prior to joining Access - The Foundation for Social Investment, Seb was Deputy Chief Executive at the Social Investment Business where he led on developing a range of programmes helping charities and social enterprises access social investment, and bringing new investors into the social investment market. Seb was previously Director of Strategy at ACEVO, and he started his career as a student executive officer at Leeds University Union.

Seb was awarded an MBE in the Queen’s Birthday Honours in 2022 for services to Social Investment. Seb was appointed to the Council of the University of Leeds in August 2016, and also serves on the University’s Strategy and Investment, Gift Acceptance and Remuneration Committees. You can follow Seb on twitter at @sebelsworth and read his regular column in Third Sector magazine.

Seb Elsworth MBE



Additional content
  • Read a transcript of the webinar

    Nicola Toyer: The next speaker is Seb Ellsworth, the CEO of Access the Foundation for Social Investment. Seb was the founding CEO of Access the Foundation for Social Investment and has led the organisation since its inception in 2015. As CEO, Seb has overseen the significant impact of the foundation. Working in close partnership with a range of organisations to increase access to finance for community-based charities and social enterprises, Seb is widely recognised as a collaborative leader and advocate for enterprise development and social investment across the sector. Seb, welcome to the stage.

    Seb Elsworth: Bear with me while I just open a little bowl of water here. Thank you Nicola so much for that introduction, and thank you all for being here being here today. I'm really grateful to have the opportunity to talk to you and explore a little bit more about what we mean by financial stability and resilience in the context of Access's work.

    I know there's a combination of people, both in the room and online, from operating charities, as well as Trusts and foundations and others working in this space. So I hope to cover a variety of ground and explain a little bit about, I think, how we all relate to this this topic. So what I hope to do in the next 20 minutes or so, and I really want to make sure there's some time for questions is first of all, is say a little bit about access, who we are, why we were set-up on then talk about what sustainable change really means to us.

    And that's embodied by this concept of resilience, how we think about resilience, why it matters to the sector. And in that context, then say a little bit about what the role that enterprise plays and enterprise models within the sector plays in building resilience and how we deploy our various different tools to try to enhance enterprise opportunities in the sector and then put that in the context of the social investment ecosystem as well and how we're trying to influence the broader system.

    But then crucially, bring it all back to your work in your organisations, whether you're an operating charity, thinking about the role that investment can play in helping you to develop your work. Or indeed, if you're a trust and foundation, thinking about how this is an opportunity to deploy some of your money in line with your mission and impact.

    So we'll do that in 20 minutes and then we'll have a bit of an opportunity for some Q&A. So I hope that sounds alright. So first of all, a bit of a history lesson to build on either those history lesson. Why was Access set up? So we're not quite as old as Rathbones, but set up nine years ago on a mission to build an investment ecosystem to help see an investment ecosystem that works for all charities and social enterprises, helping to create stronger communities.

    A grand vision, I think you'll agree. But that focus on community is really important for us. So we are particularly focused on supporting charities and social enterprises that are perhaps at the community end. So really rooted in communities, perhaps organisations that are generally at the slightly smaller end of the market, but still those that are professional, have staff working in that kind of community setting.

    So if that's our vision, there's perhaps an assumption in there that the ecosystem isn't working perfectly for those organisations at the moment. And what are those challenges? And why will we set up to try and address some of them? There is, of course, a really long history off of social investment.

    It wasn't necessarily always called social investment in the past, but many organisations have borrowed and have accessed finance in order to scale their work, not least, of course, in the form of mortgages and lending for property. But during the sort of first decade of this century, there were a number of real pioneer organisations like social investment business, like the Key Fund, like Big Issue Invest, who were really starting to think about how capital can be made available to social impact organisations in much more flexible, dynamic ways, be that to support their growth, be that to support Their ability to deliver contracts for government, for example.

    And then there was another big step change in around 2012 when Big Society Capital was created. Big Society Capital is our sister organisation. And that was a big injection of new capital set up as a fund of funds. So a wholesaler working through a range of different intermediary organisations with 400 million pounds from the Dormant Asset Scheme and another 200 million pounds from mainstream banks.

    So lots of capital looking for a home in the charity and social enterprise sector, but going back to other community organisations who were looking to access finance, a bit of a mismatch or significant mismatch between the kind of finance they were looking for and what the market was actually able to provide them with. So we've got this supply gap here on the diagram between what social investors are offering and the social investment products that charities and social enterprises really need. And if you look at data from social enterprise UK, an average social enterprise looking to take on finance is probably looking for an unsecured simple loan of around 60 to 80, maybe up to 100,000.

    What was available at that time typically were larger secured loans or more complex products like social impact bonds or the growth of a kind of social venture offering. But that supply of simple, unsecured, relatively small-scale finance was really hard to come by. And I'll go into a little bit about the reasons for that in a moment, but essentially the social investment providers, so those intermediary organisations, were not themselves financed in a way that enabled them to offer that kind of relatively high risk, small value finance on to charities and social enterprises.

    And at the same time as that supply gap, there was also a demand gap. Many organisations perhaps didn't know that taking on finance could help them develop their models, or even if they did know, they didn't know how to access this rather messy and fragmented market, or even if they did know how to navigate that market, they were relatively early stage in terms of the development of their enterprise models.

    And so a real need for long term consistent support and capacity building within the sector to increase that demand for finance. So we had a supply gap in terms of the products available and a demand gap in terms of what charities and social enterprises were asking for. And so we were created to work on those two challenges.

    We have really two halves of our work that respond to that. The first is financing those social investment providers. So there's intermediary organisations in a different way, enabling them to offer that smaller scale risk taking patient finance to charities and social enterprises, and that has been financed with around £100 million from the Dormant Assets Scheme and the National Lottery Community Fund.

    And on that work, on capacity building and providing long term enterprise development programs, that's been supported by a £60 million endowment from the UK government - a 10 year spend down endowment, which I will return to because Rathbones have been managing that for us. And I want to say a little bit about that.

    All of this work, though, is for us done at a wholesale level. So you may never have heard of us on. That's fine, because we are not the organisation that charities and social enterprises would engage with. We work through a range of about 25 to 30 intermediary organisations around England, who are the ones who are offering that finance to charities and social enterprises.

    So that was a little bit of context about who we are. What do we mean by resilience? And why does it matter in the context of building sustainable impact models in charities and social enterprises? We think it's crucial, obviously, that resilience in the sector is built and maintained.

    And there's been lots of factors over the last few years that have been challenging resilience in the sector - the pandemic. cost of living crisis but also really significant long-term changes in the sector's business models, changes in funding streams from government changes in those enterprise models and so on.

    Now, there are a million ways to define resilience and there are PhD theses written on the topic and I'm not going to try and add to that weight of thought. So to be clear, we're really talking about financial resilience. There are obviously lots of other dimensions, governance, leadership, markets, et cetera.

    So we're really talking about financial resilience. And what we are striving to see is that organisations are more financially resilient and have better ability to plan for the future, withstand shocks and seize opportunities. And for us at the heart of that is income diversity. And we see a particular role for income diversification through the growth of enterprise models, earned income in the sector.

    Now, there's lots of misunderstanding over the years about the role that social investment plays, going back to the days when big society capital was created, obviously combined with a period of significant austerity. I think the message often out to the sector at that point was, "Oh, don't worry about these cuts in your grants. This social investment market's going to save the day". Now, of course, you can't replace lost revenue with taking on debt. The missing piece of that discussion was "What are the enterprise models within the sector that are really going to help us to generate unrestricted income that might be able to grow with taking on finance and enterprise support?"

    And similarly, we are not assuming that charities magically become social enterprises overnight. Most organisations have already had very diverse business models, of course, but what are the opportunities within the context of those diverse business models to grow the enterprise aspect. And so this is something we've been working hard at over the last number of years.

    And just to explain a little bit about, put a little bit of substance on, on what we mean by these enterprise models and what we're learning about them. This is a bit of insight from our major capacity building program, the enterprise development program, which has been running since 2015.

    We've funded this to the tune of around 14 million pounds and it supported 325 organisations across these six sector themes. So homelessness, youth, mental health, equalities, environment and a specific stream for black and minoritised led organisations. And the logic of working in these themes is partly we don't have sufficient resources to support the sector as a whole, but also partly because when you do this thematically, you can really start to get under the skin of what enterprise models really look like in achieving these different kinds of outcome areas.

    And I just want to say a little bit about what we've learned from doing that work in those themes. First of all the enterprise models that underpin the impact that organisations can achieve in those sectors are really, really varied. What you're seeing on this slide (the text at the bottom may be a little bit small), but the distribution within the cohorts of those organisations. Those 325 who've been supported by this program, the kinds of different business models we're seeing there.

    So those are consulting, work training, horticulture, shops owning buildings and charging rent to tenants, vocational training, food and drink, space hire, events, membership, et cetera, et cetera. So really diverse trading models, which many organisations are already doing, of course, but perhaps not thinking of it as enterprise activity.

    And I think that's crucial to raise the conversation about what enterprise models already exist in the sector. Secondly, what we're seeing is that many of those sectors, indeed, all of those sectors, are really diverse in terms of the income mix. So what this graph is showing you is in each of the six sectors that we've worked in, you are seeing the presence of enterprise models, commercial and trading models.

    You're seeing those organisations also receiving grants from foundations or other organisations, you're seeing donations from the public and you're seeing other income as well. So all of the sectors have all of those aspects, and many organisations are really across the range of those different income streams.

    So, most sectors are really diverse in terms of their income mix already, but the opportunity to grow enterprise within that is significant. And then the third insight is that you can really start to build a knowledge base and the patterns around the types of enterprise models that exist when you start to dive into the data.

    So three snapshots here. Firstly, from our cohort of environmental organisations, what you're seeing from these yellow and blue charts is the proportion of organisations who are developing enterprise models in different areas compared to the market as a whole. And for example, you see more organisations working in retail and catering enterprise models, but fewer than the rest of the market, but fewer than in services and contracts related markets. But again, more in space and asset hire.

    So by starting to benchmark this, you can start to build knowledge bases within those sectors about "okay we're a homelessness organisation, and these are the kinds of enterprise models that exist in our market". So that bottom right-hand taxonomy there really summarises all of the enterprise models that we've seen in the homelessness sector, for example, and they fit there into those six headings. Some are really around employment-based opportunities. Some are around owning buildings and houses. And we think this kind of taxonomy of enterprise models is really important because it gives us and other funders a better insight into how to support the development of enterprise activity.

    But most importantly, it enables leaders of those charities and social enterprises to start having more tangible conversations about how their enterprise models compare to others in the sector. And then we can start to get into the detail of what kind of margins you can expect from running certain kinds of business, how you're faring against others.

    Now, of course, not all of this enterprise activity will be in itself profitable, but in almost all of these cases, it is aligned to impact. And so as a means of generating some income, it's very important, of course, to understand the relationship between impact profitability, the extent to which you're cross subsidizing some of these some of these activities.

    But we know that many organisations in the sector pursue enterprise without necessarily realising that there might need to be some cross subsidy models in place, but that's really a judgment for the leadership of that organisation when they understand the profitability of these different models.

    And so we think being more explicit about enterprise models, sharing much more knowledge about how they work is a really important tool in achieving that. And we're working to support the development of those enterprise models across the life cycle for many, many organisations. So this enterprise development work for organisations looking to diversify their income streams, our investment readiness work through the reach funders for organisations who are closer to taking on investment and then blended finance as our tool for helping organisations to access small scale unsecured finance who are at that point of wanting to take on capital to grow those enterprise models further.

    And then just a brief word on how we measure resilience through this work. So our theory of change very much says that income diversification, that ability to generate more income through enterprise is an important aspect of financial resilience. But how do we know? How do we? How do we measure that?

    First of all, to say it's not straightforward measuring resilience, of course. We think it's really a triangulation of qualitative and quantitative measures. And from a quantitative point of view, there's a range of financial metrics that we think are important, and it really boils down to income growth and income net assets and changes in net assets and then the diversity of income streams.

    And what we hope and what we're trying to do over time is actually take that data from already published statutory accounts and look at this on a longitudinal basis across the organisations we support. So to try and reduce the burden of reporting, reporting to different funders as organisations go and really starting to build that picture now we've been going for a while.

    Then from a qualitative point of view, of course, there is a very subjective aspect to resilience. Do you feel more resilient than you did a year ago? Do you feel like your organisation is in a better place to withstand shocks? And so we asked the leaders of organisations and we asked the intermediary organisations they are working with about their perception of resilience.

    And we have a range of different evaluations in place across our work. There's a quote here from a major evaluation on our growth fund, which was the largest and most mature blended finance program, that from that kind of analysis concludes that financial resilience did grow for those organisations as a result of taking on those small scale unsecured loans and that they had attributed that growth and resilience to accessing that finance.

    So I just want to zoom out a little bit now and talk a bit about the broader social investment ecosystem. And try to explore a little bit about the ways different organisations fit to fit within it and ultimately where you might fit into that system.

    And in framing this, there are two parts we think that are really important. The first is access to capital. And it's important to realise that many of the organisations who are making social investments - so the ones you might go to if you are looking for finance - they are doing so with other people's money. In some cases, they have their own money, particularly foundations making social investments, but in many cases they are fund managers from a variety of different sources.

    Now, those are organisations that are experts in understanding charities and social enterprises, the needs they have. Very expert in reaching deep into the communities where those organisations are working. But to meet the needs of those charities and social enterprises, as we've heard, they need to have the right kind of finance available to them so they can make those small-scale unsecured loans to the sector.

    Many different investors make their capital available to those intermediaries. The majority of those investors are not in a position to be able to tolerate any loss. They are themselves, either banks or fund managers or pension funds on even if they have a very strong impact lens, they are obviously looking to make a return on capital, protect their depositors money, protect their pensioners money, as you might expect, and even dedicated impact investors like our sister organisation, Big Society Capital, have a mandate to grow a sustainable social investment market and therefore looking for positive returns and looking to bring co investors alongside.

    So the incentives in that ecosystem are not necessarily aligned between what those investors need and what the charities and social enterprises are looking for in terms of finance. Now there are some organisations like Access who can make finance available to those intermediaries on concessional terms.

    But there are other tools as well, and it's really important we think about how those are integrated. So guarantees from the British Business Bank for example, tax relief, like community investment tax relief and so on.

    And then the other aspect of this is the access to knowledge and support. So there are many organisations that are committed to growing enterprise activity, and we think it's really important that work gets embedded in infrastructure organisations and networks that already exist within the sector. But they themselves are often under resourced on need additional support.

    And then foundations sit in the middle of this ecosystem. I think they can be investors, they can be supporting enterprise development. Sometimes we find that the programmatic work of foundations can actually be there can be a slight misalignment with some of the objectives of diversifying income streams. And we're very interested and keen to work with foundations around how we encourage more alignment around understanding enterprise models, and when foundations are making grants, that they're doing so in a way that really complements the ability of organisations to develop those enterprise models rather than hinders it if perhaps you're giving a grant to something that could be revenue generating.

    So very quickly, our role in bridging that divide, if you like, between the needs of investors and the reality of the underlying business models of charities and social enterprises is what we do through our blended finance work. This is where we've committed at the moment over 100 million pounds into social investors to support this activity.

    I won't go into the financial engineering of it, but essentially we are, putting in layers of grant into social investment funds that enable other investors in those structures to be confident that they will get their money back, they will generate a modest return. But we are incentivising the flow of smaller scale, unsecured finance and supporting the capacity building around that.

    And this just some statistics from our growth fund, where we've supported over 725 deals into charities and social enterprises that typically have half of the turnover and about an eighth of the assets of other organisations who've been able to take on social investment. And crucially very strongly aligned to the areas of most deprivation within the UK. And this is one of the unique aspects of this blended finance model is that it very strongly correlates to finance flowing to the most left behind communities, which obviously is very different from other flows of capital.

    So just coming to the end, what does this all mean for you and the role that you might play in this ecosystem?

    There's obviously 22 key things you might be thinking. First of all, you might be wondering, how do you access this market? How do you look for social investment? So the place to start is Good Finance. and the navigation tool for social investment ecosystem on will help you understand what your needs might be. There are, of course, a wide range of different offers out there in the market and not just from specialist social investors, but from broader providers as well from forms of debt, forms of equity, including for asset locked organisations and quasi equity models or community share models and other kinds of finance such as social impact bonds. So I would commend good finance to you as the place to start.

    And then the other aspect, of course, is deploying capital and thinking about your role as a social investor yourselves. And of course, you'll be aware of updates to Charity Commission guidance off the back of the Butler Sloss judgment which has really clarified the law around the responsibility of charity trustees in terms of making investment decisions and crucially that all those investment decisions must be in pursuit of the charity’s objects.

    And bearing that in mind, many foundations are thinking about the extent to which their investment strategies are aligned with their mission. One example of that is our 60 million spend down endowment. We were spending down over 10 years. We had a very limited term to think about how we deployed that money. We wanted to build a fixed income portfolio as aligned as possible with our objectives. And Rathbones have managed that for us with a portfolio of charity bonds which have been being held to maturity during the time that we've been spending that endowment down. And at its peak, we had almost 50 percent of our capital directly invested in the sector that we were seeking to support. And we've been publishing impact reports on that ever since.

    I will skip over that last slide in the interest of time and invite some questions. I hope that's been a helpful overview. I think there'll be some questions in the room and then we'll take some online as well. I'd be delighted to take any questions or comments if there are any.

    There's a lady here. I think there's a microphone just coming over to you.

    Zoe: I'm Zoe. I'm from a charity called Climate Outreach, and we do stuff around public engagement on climate. And one of the things we want to try and do is to, I think, do what you've been talking about with the kind of enterprise model in that we're trying to develop a new arm which will deliver us earned income as well as delivering impact.

    And I guess it's just for you to talk a bit more about that and also how do you talk about the challenges and how do you then talk about things when they might not quite go so well and how to talk about that to the companies we might be working with. As in the challenges for you and going through that kind of transition.

    Seb Elsworth: Yeah, for sure. We chose to work across a number of different sectors really to explore the range of different kinds of models. And so homelessness, for example, was a relatively straightforward sector to work in because there are pretty well-established models of social enterprise in, in the homelessness space.

    Catering businesses, for example, employing people who have been sleeping rough or at risk of sleeping rough, the kind of housing model. So that was a sort of safer space for us to work in. We then also chose to work in the equality sector. So typically social justice organisations who had Usually been almost entirely funded through philanthropic grants or relationships of trust and foundations.

    And we wanted to work in that sector partly because we thought it would be really hard to identify what the enterprise models would be and try and build scale there. And what we found actually was that it wasn't as hard as we had seen. And there is a predominance there of training and consultancy models where organisations are selling services on a B2B model or back into the charity and social enterprise sector. But it isn't a binary thing. So it's not about going from zero to 100 percent of your income coming from enterprise. It might be going from 20 to 40% or 20 to 50%. So I think it's important to be realistic about that.

    The challenges are, of course, multiple. And one of the tools that we've deployed, and there are a number of other grant makers that deploy these kinds of tools, is what we call incentivised grant tool called Match Trading, and it's quite good for organisations that are at a relatively early stage of that journey so that you as a funder of enterprise support, you're matching the increase in earned income year on year with additional grants.

    So rather than confusing the leadership of that organisation and saying, we want it to be more enterprising, but also you need to go off and chase a load of grants over here, we actually enable the focus on growing the earned income model by saying you will be doubly rewarded for that with it with additional grants.

    But the focus of the kind of peer support communities has been a really important way off of building that support network around the personal challenges. And of course, many people come into this sector, not necessarily for enterprise reasons, but, coming for the mission and the social justice that they're trying to pursue.

    But, we've found and through the work of partner organisations like School for Social Entrepreneurs, that actually, some of that can be learned, particularly within a peer. So we think some of that peer learning is really important.

    Xanthi Williams: Hello, I'm Xanthi Williams from the Northwick Trust, we're a charitable trust. Just following on from what you've just said, do you have a target that you're aiming for as a percentage of how much charities income should be generated by enterprise?

    Seb Elsworth: Yeah, that's a great question. Not a numerical target, no. I think our sense is that, charities and the sector as a whole, has a diverse income stream and always has. And there is an opportunity for the enterprise element to grow in, not for all organisations, but for some, it could potentially grow quite significantly. I'm of the view, personally, that there is generally a pretty limited amount of philanthropy and grant around.

    And so the objective is to grow the enterprise income to the extent that you're not giving a grant to something that could be enterprising on. Therefore, the philanthropy is going into activity that can't be revenue generating. And that may be within the same organisation's business model or across the sector as a whole.

    I think the data from the NCVO almanac suggests that enterprise growth had been the dominant area of growth, certainly prior to the pandemic. Obviously, the pandemic was a challenge, and I very much recognise that many organisations who had been told for years, "diversify your income, be more enterprising", did find the beginning part of lockdown most challenging when obviously, many of those trading routes did dry up temporarily, but they also tended to be the organisations that then bounced back the strongest afterwards as well.

    And so there's a kind of mindset element to this as well as a purely business model related element to it, which is an enterprising mindset we've found can help organisations navigate those kinds of challenges as well as diversifying their income streams.

    Were there any questions online? Great.

    Eunice, our Event Manager: So is there a risk that promoting diversification through enterprise models risks diverting focus from primary purpose? For example, finance repayments can disproportionately drive behaviours.

    Seb Elsworth: There is definitely a complex dynamic between enterprise models and impact, and it's really important, I think, that this conversation around how we frame enterprise, how we break down in different enterprise models is absolutely in the context of the extent to which this is aligned with delivering your impact.

    Now it's perfectly legitimate for organisations to pursue an enterprise activity that, that isn't focused on the organisation's impact. But in that case, it really needs to be surplus generating so that surplus can be recycled back into the organisation's impact. What we've seen through our work is many, many organisations who are able to align their enterprise activity directly with their impact. Again in homelessness, many examples of organisations who are, employing people who may have been at risk of sleeping rough and bringing them back into the labour market as a result.

    Now that activity may not be surplus generating. It might be running a community cafe, employing people in that context might lose money. But if you are conscious that it's a primary way of driving impact, it's a primary way of build building relationships with your community, then you can make a strategic decision to subsidise that activity and you still may be receiving a significant amount of income for doing that work.

    But that's all in the trade-offs, and all in the kind of need to be really clear about what the enterprise model is achieving. So it's absolutely a triangulation of resources of impact and of that income diversity. But you need to know you need to know how aligned it is with impact.

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