Scotland’s social economy thriving as revenues soar by £20 million

Social Investment Scotland report highlights more jobs and higher turnover for its customers

Social Investment Scotland’s (SIS) customers have delivered a fifth consecutive year of increased jobs and trading income, according to the charity’s latest annual Social Impact report.
The 2016 report published today (Monday, 17 October) follows months of in-depth research among 118 SIS customers comprising social enterprises, charities and community organisations, to measure the impact of investment on their social and economic goals.
It shows that, over the past year, SIS customers have created 363 FTE jobs and sustained more than 3,000 jobs. Customer turnover reached £192 million for the year, an increase of £20 million on the revenues generated by SIS customers in 2014/15.
SIS says that, given the positive financial indicators, third sector organisations are also displaying an optimistic outlook for future performance. Nearly two thirds (63%) believe that they have increased their financial sustainability over the previous year, and roughly the same number (64%) felt confident they would be able to grow the scope or scale of their activities.
As well as the improved economic impacts being delivered by SIS customers, the report also highlights some significant social impacts, across a broad range of indicators including the environment, employment, mental health and housing.
For example, 34% of customers have employment, training and education as a primary outcome and of these 62% are working towards moving their beneficiaries into suitable employment, training or education.
SIS also reports that 26% of its customers’ beneficiaries live in the bottom 15% most deprived areas of Scotland (as ranked by the Scottish Index for Multiple Deprivation or SMID).
Better financial management increases both sustainability and jobs
Since publishing its first Social Impact Report back in 2012, SIS has supported 237 customers and provided 333 loans. A comparison of performance metrics across each of the five Social Impact Reports has revealed a number of positive trends in customers’ financial operations and social impacts.
Average turnover has nearly doubled from £843,000 in 2012 to £1.6m now, while total turnover has more than quadrupled from £47 million to £192 million. Successful financial performance is reflected in the jobs market with total FTE jobs supported increasing from 909 to 4,596.
One of the key goals at Social Investment Scotland is to help third sector organisations become less reliant on grant funding and more financially sustainable. In this regard, SIS has also been able to deliver considerable progress.
The percentage of customers without any grant funding has increased from 12% to 18%. The percentage of customers with more than 50% of their income generating from trading activity, has increased from 43% to 62%.
SIS chief executive Alastair Davis said: “The last five years have seen many more social enterprises wake up to the potential of social investment in helping them deliver their social goals. No longer solely reliant on grant funding, many of these organisations are taking on investment to help increase trading income which, in turn, is helping them to increase their local social impacts and support thousands of jobs.
“During this time, SIS has also had to grow and evolve its offering from one focused purely on financial support to one that’s more akin to a business adviser, mentoring and nurturing customers throughout their journey.
“Despite this growth, I’m proud that our focus on supporting the most marginalised communities has remained unchanged, and we have also been able to maintain our high service standards, as judged by our customers.”
Nick Kuenssberg, chairman of SIS, added: “Through improved governance and a greater understanding of financial sustainability, our customers are making deep and long-lasting impacts on their local communities.
“With demand for social investment staying strong, we’ve also seen a greater and more varied supply of social investment capital, which is helping us meet the needs of our customers with more tailored financial solutions for their specific business needs.
“As the broader economic outlook is set to remain volatile, it’s vital that we continue to help the third sector fulfil its potential to deliver both much needed public services but also credible socially-focused alternatives to the products offered by the mainstream business sector.”
SIS is a charity and social enterprise which provides loans to other charities, social enterprises and community groups acorss Scotland.
Read the full report here
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Hannah Hamilton, who is a former Fife College student, is a reporter and assistant content editor for Scotland B2B, specialising in B2B news and features. She can be contacted via