We have made loans to 585 social projects totalling EUR 97.1 million. In addition, we have EUR 336.8 million in loans to social housing projects – providing accommodation for around 9,300 people.
Our vision and activities
Social projects lending
Percentage of our loans to the social sector
- 7.9% to social housing
- 2.3% to social enterprises
Lending by subsector
(social enterprises only)
Our vision on social projects
There are many social organisations and charities developing commercially viable approaches to tackling social problems. At the same time, we see a growing number of social entrepreneurs: individuals creating new business models driven by a social motive to serve a specific group in their community or in society, underpinned by the notion of disciplined business management.
Financing the social economy
We see the potential for this emerging ‘Social Economy’ sector to play a positive and significant role alongside the public sector and the conventional business sector in shaping our future economies.
Within this sector we focus on relationships with leading social entrepreneurs who can demonstrate that their approach has a clear positive social impact for the communities they serve.
In many cases, social enterprises are adapting to major changes in governmental and public sector funding. As such they need to be innovative in how they organise their business so they can deliver the biggest possible social benefit whilst also being economically sustainable.
We are particularly keen to support business models that have the potential to become scalable and increase their impact through growing their business and inspiring others to do the same.
Our activities within social projects include loans to organisations delivering a positive social benefit from community enterprises, fair trade businesses, and social enterprises offering employment to vulnerable or disadvantaged groups, to not-for-profit social purpose companies, and providers of social housing.
What challenge was the inspiration for your project?
Alternatives Familiales asbl is a non-profit organisation, serving people in Belgian Brabant, Brussels and Charleroi, that is dedicated to the welfare of young children and minors that have been entrusted to a foster home as an alternative to institutional care. The organisation works in three principal areas – guidance and follow-up of a child’s well-being, maintaining or restoring regular contact between the child and his or her family, and support for the host family.
With a staff of 18, including nine social workers, a child psychiatrist and three psychologists, Alternatives Familiales currently oversees the fostering of 195 children, making it one of the most important independent social services of this type in the country. Triodos Bank funded Alternatives Familiales with a mortgage credit that allowed it to purchase the building which houses its offices and activities, in which it had been a tenant since 1972.
Guy de Backer, Director of Alternatives Familiales, explores the impact of his organisation and the bank that financed it:
First of all, we should be clear that our area is not really business; we’re a non-profit organisation in the social services sector. So the project was not a new business initiative, it was more a consolidation effort.
The building that houses our offices, our 18 staff and our entire operations, in which we have been tenants for the last 42 years, was put up for sale by the owners. They wanted to take advantage of the increase in real-estate prices in the area over the last 10 years.
We were faced with the uncertainty of losing our home or having our rent raised by a new owner, and having to find somewhere new anyway. This would not have been ideal, given that rents in the area have increased considerably in the last decade. At the same time our location is key to our work, centrally positioned between Brussels, Belgian Brabant and Charleroi.
What was your innovation that addresses this problem?
We had no guarantees as to what plans a new owner would have for the building, so the only solution that would ensure an uninterrupted future was to become owners of the building ourselves. By doing this, we would not only maintain our location, we would also consolidate our asset base. But as Alternatives Familiales is not a business in the entrepreneurial sense of the word, this was a unique proposition and certainly an innovative approach to solving the problem.
What impact has Triodos Bank had on your activities?
Triodos Bank worked out a mortgage proposal with us, one that allowed us to achieve two very important objectives. The first was to continue operations from the same central location that has been key to our activities for the last 42 years – in fact, we have felt so at home in this building that we even carried out renovation works at our own cost, as tenants. The second objective, more long term, but no less important, was to put us in a position to consolidate our position and eventually become outright owners of a valuable piece of real estate in 25 years’ time. The cost of this is higher than our previous rent, but we have converted an irrecoverable monthly outgoing into a monthly investment in an asset that we hope and expect will grow in value.
Triodos Bank has also handled our ethical investment portfolio for the last 10 years. They have been a partner that has helped us to grow and consolidate, which in turn has allowed us to provide an uninterrupted quality of service for the people who matter most, the children and their families.
What impact have your activities had on the sector you work in?
We are the largest service of our kind in our region. We oversee the entire fostering process including follow-up for almost 200 young children and minors, from as young as two years of age right up to adulthood.
For most of our fostered children, our involvement is a life-long, and life-defining project. Fostering is a much less common practice in the south of Belgium than in the north, but in our experience it is an infinitely preferable alternative to institutional care for most children. Growing up in a secure and stable family environment contributes both to a child’s development, safety, security and ongoing education, and it takes part of that burden away from the State. So our contribution has essentially been to advocate and provide a normal family environment that allows at-risk children to grow up and develop in the same secure way as other members of society.
What impact have your activities had on the community?
In over four decades we have facilitated and overseen the fostering of several thousand children who would otherwise have missed out on family life. Our work here is long-term, and important – our team includes qualified social workers, psychologists and a child psychiatrist. Our relations with the community are key to our activities - not only do we place children in an appropriate foster family environment, we also provide follow-up for as long as is necessary.
We facilitate contact with the child’s parents and we support the host families as well. But we also actively promote, as far as we can, the need for foster family services to potential host families. Fostering is less widespread in our area, and it’s important to make people aware of the good they can do, not only for a child but also for the community, by fostering. Because we need more foster families.
The Together Group
What challenge was the inspiration for your project?
Preparing for a life free of crime is a huge challenge for many repeat offenders. Offenders often leave prison with no permanent address, a history of substance abuse, broken relationships, literacy challenges, a criminal record and limited employment histories. The combination of these factors can provide a huge barrier to re-entering society and sourcing employment, typically leaving individuals with very low self-esteem or sense of direction. Re-offending rates are high, with 26.1% of all offenders re-offending within 12 months of being released from custody. This reoffending has a significant cost to society, estimated to be £9.5 - £13 billion in the UK.
Those who can find work are far less likely to return to crime - The re-offending rate for short-sentenced offenders who do not enter employment after release is 69% compared to 32% for those who do enter employment. But opportunities are few and far between, and high unemployment rates in the UK making it particularly difficult for ex-offenders to find work.
What was your innovation that addresses this problem?
Together Group founder Paul Harrod saw an opportunity to address the social need with a self-funding, and scalable business model. A programme of supported paid work, skills training and tailored mentoring can provide many ex-offenders with a pathway to meaningful ongoing employment, helping to break the cycle of re-offending and, in so doing, transforming their lives. By creating employment opportunities in the construction industry for ex-offenders, he believed he could inspire them to see that there is a life beyond crime.
The concept was based on a commercially sustainable business model - buying empty and sub-standard homes and employing ex-offenders in the repair, refurbishment and restoration. In so doing, offenders are equipped with the confidence, training and paid experience required to secure ongoing employment in the sector. Once the properties are fully restored they are then sold and the original capital, plus any profits, re-invested back into the business to finance further property purchases and further job creation.
What impact has Triodos Bank had on you and your business?
As a trustee of the Restore Trust, Paul Harrod he had been involved in a grant funded project which employed 98 ex-offenders to refurbish six properties in Bristol. He was inspired to replicate this success with a self-funding, and scalable business model. But he would need capital to establish the enterprise. Contacts in the social sector suggested he should approach Triodos, which he did with little more than the idea for the model and how it could work.
Triodos Bank has played an active role in developing the enterprise from the start. The idea’s high potential for social impact was clear, but without a proven pilot model, it was a risky project to invest in and hard to justify on strictly commercial grounds. Seeing the potential of the idea, the bank’s corporate finance team took a long-term view, supporting it with a vision to scale and replicate the model in other cities.
“We couldn’t have achieved this without Triodos,” says Paul Harrod. “They were prepared to help me to turn a great idea into a real business and the investment readiness advice and credibility with investors was critical to the success of this deal”.
Triodos helped to nurture the project from idea to implementation, working with Paul Harrod to building the business from concept to a viable investment proposition. One of the first steps was building a leadership team around Paul Harrod with the experience of property development and refurbishment. With this in place Triodos acted as lead advisors for the initial fundraising in 2011, securing £600,000 of social investment. The money raised, together with short-term loan finance from Triodos Bank facilitated the purchase and renovation of Bristol Together’s first two properties.
Following the success of Bristol Together’s pilot stage Triodos worked to raise more capital to take Bristol Together to the next stage. A further £1 million was raised through a bond issue in 2012, which included the innovative use of community interest tax relief (CITR) creating a strong financial return for investors. In 2013 the vision of replicate the model in a second region was realised with the launch of Midlands together. Working with Triodos Bank, The Midlands Together Bond issue raised £3 million to help roll-out the model into the West Midlands.
Paul Harrod is working to expand the business to other parts of the country. The next phase in the roll-out of the Together Group social enterprise model is planned for Glasgow in 2015, and the Together Group are in talks with groups nationwide. With a strong social need and the right conditions present for success, there’s every reason to believe that the Together model can be put to work in cities across the UK, delivering significant social benefits through a self funding model.
What impact has your business had on the sector you work in?
At a time when government funding cuts have put charity and public service provision under extreme pressure, the Together Group provides a model for a self-funding solution to multiple social problems, and an example of the power of impact investing in delivering social and financial returns. In 2012 its potential was recognised by trade body Social Enterprise UK in the social enterprise awards, when Bristol Together won start up social enterprise of the year.
What impact has your business had on the community?
The most significant impact of the Together Group’s work is enabling the ex-offenders it works with to reintegrate with society, becoming productive members of the community. Bristol Together has helped more than 60 people into work, and with only one person re-offending in that time – a rate of 1.6% of participants, compared to the national average of over 25%. Over the life of the Bristol Together and Midlands Together bonds they aim to create training and mentoring for around 300 ex-offenders, paying wages in excess of £3 million.
To calculate the people accommodated figure we have used an average unit cost, assumed that we have lent approximately (and conservatively) around 70% of the borrowing for each project. The rest of the finance coming from grants or profits etc. The number of people accommodated is derived from a calculation of average households per unit (3.5) and based on volume of lending divided by average unit cost.