Kindred, a non-profit investment fund, lends to entrepreneurs focused on transforming their communities, with the loans part-repaid in the social value they create in their communities and any returns pooled into future investment. 

The money is then used over and over again to help other social businesses grow and succeed in an unique approach to funding community-driven growth that could be replicated nationwide by prioritising the needs of the UK’s social enterprises. 

It has so far invested £2 million in nearly 45 local, impact-focused businesses which are developing innovative solutions to various social issues such as mental health, the care crisis and support for asylum seekers. They include: 

• SHOP: a shopping delivery service that supports Liverpool’s care system by helping older people strengthen their independence at home following a hospital stay or illness. It delivers 80 hours of support to 60 people each week, compared to 35 hours of support to 27 people in 2020, and last year saw more than two thirds of its referrals turn into long-term cases, compared to 13% in 2020. 
• Open Door: a provider of talking therapies to support mental health and wellbeing. Since 2020, it has doubled its turnover and the number of people it supports.
• Grow Wellbeing: a forest school provider. It has trebled the number of people it employs and more than doubled its turnover since receiving the investment from Kindred
• Café Laziz: a community café run by refugees and asylum seekers, providing them with training and employment opportunities. Its volunteers have all achieved Level 2 food safety certificates and are now working on City and Guilds qualifications. 

Kindred was set up in 2021 with £6.5 million funding from the Liverpool City Region Authority and charitable trust Power to Change. With Liverpool among towns and cities across the UK facing high levels of deprivation and areas blighted by empty and abandoned buildings, it is also plugging gaps left by traditional businesses, with the enterprises it supports taking over previously empty properties, creating 5% of the region’s jobs and leveraging £10 million in investments into the region.

Last year, the social investment market was criticised by The Adebowale Commission for not prioritising the needs of social enterprises in the UK, highlighting a lack of affordable and flexible finance which has hindered their growth and sustainability. But Kindred is bucking this trend by working with social enterprises that would struggle to secure traditional forms of funding and investment, and this support has already helped them to double their income and the number of jobs they have created collectively. 

‘What’s gone before hasn’t worked’

Helen Heap, a social investor who worked with Kindred on its launch and is now a member of its board of directors, said: “There’s a lot of evidence that what’s gone before hasn’t worked as well as people had hoped it might. Big Society Capital was set up in 2012 to provide more money to social enterprises but we’ve had a decade with many social investors getting really frustrated that they’re not able to make that money work as well as they wanted it to.

“A lot of social investment is driven top-down, from an investors’ perspective. They want to get their money back within a short period of time, they want a financial return on top and they want to minimise the risk for themselves. That means that social organisations who are set up to solve a particular problem, not to meet the criteria of a certain kind of investment, often must bear most of the risk. There needs to be a satisfactory middle ground that balances the needs of social enterprises with those of investors to meet the objectives of both.

“Kindred starts by understanding how that money fits in with what a social enterprise wants to achieve. Because the investment has been designed to meet the needs of social enterprises, it’s much lower risk than if it was designed purely from an investor perspective, therefore you’re much more likely to get your money back whilst also delivering a social impact.

“The decision for social investors is whether they are prepared to accept lower than market (but not zero) financial returns in addition to the social return they get from investing in a social enterprise.”

‘I was very scared about taking on any form of investment’

Lee, from mental health charity Open Door, said: “Without Kindred, I’d never have had the confidence to secure funding that would have helped us to grow as an organisation. I was very scared about taking on any form of investment that could have led us into debt. But Kindred’s approach to lending has been a game-changer for me and my business.

“They saw the potential in Open Door and worked with me to provide the funding we needed to take it to the next level. The repayable investments we secured from Kindred have now been used to secure investments on a whole different scale and they have prepared us by helping to develop our people going into these new conversations with confidence.”

‘SHOP has been a constant for us in amongst all the chaos’

Vicki, whose 96-year-old mother-in-law Win has been delivered weekly groceries by SHOP since the Covid-19 lockdowns, said: “Discovering SHOP has really been one of the best things that has happened to us from the pandemic. We know that Win always got fresh food in so that’s one thing we don’t have to worry about ourselves. She does the shopping list, someone from SHOP picks it up and does the shopping for her and puts it away. They’ll have a cup of tea together sometimes, they’re just like friends.

“Navigating the care system is a bit of a minefield. We’re well aware of the crisis in care but it doesn't actually help our plight, and it doesn’t help Win. But SHOP has been a constant for us in amongst all the chaos.  They’re not just a shopping service but also a bit of a lifeline.”

‘It’s rare to find an organisation like Grow Wellbeing that is expanding’

Sophie started working for Grow Wellbeing, a forest school provider supported by Kindred, in July 2021 as a project coordinator. She works in the office, looking after HR, organising sessions and communicating with customers. She said: “I came to the realisation that I wasn’t where I wanted to be in my career. I wanted to do something in the nature connected realm where I could feel like I could make a difference in the community. But forest schools are usually a one man band and it’s rare to find an organisation like Grow Wellbeing that is expanding. I had been searching for a while. 

“One of the nice things about this job is the opportunities to do other things as well. Whilst I’m in the office most days, I’ve been given the opportunity to train as a forest school leader for free, which usually costs about £1,000. I don’t have any intention of leaving Grow any time soon because I love it but thinking about the future, it’s really good for me to have that qualification.”