When I first heard about social investment – investors who want their money back, with interest, plus social outputs or impacts, I thought it sounded a bit greedy. And they wanted up to 10% interest because, they explained, ‘we price for risk’. My head wobbled.
Social investment in the UK came into the spotlight just after the banking crisis, which perhaps should have alerted us this was a system that had some flaws. And the fact that the chasm between the very well off and the rest of us continues to gape ever wider may provide a clue about who this system is built for.
Most social investment funds have been designed by former bankers – albeit good and honest former bankers, who think there must be a better way. But system change, by the people who designed (or benefit from) an existing system, is prone to being incremental not transformational. The tech world has taught us disruption is likely to come from elsewhere.
150 activists, artists, entrepreneurs, animators, community developers, outsiders and collaborators designed Kindred. People who are having a go at making a living – building a business, with a purpose, or a passion. People maxing out credit cards, borrowing time, money and floor space from friends or family, mortgaging their homes, investing their lives and livelihoods to make a difference, change the world, live a dream. Pioneers of a new, kinder and more inclusive, economy.
We imagined what money and a support structure would look like if we ran it. Each conversation began with the assumption the rules would by ‘their rules’. How much can we have? Do we need match? Who will judge us? What must we do to get this money? But each ended with discussions about trust, sharing, mutual support and the heritage of banks as ‘friendly societies’. Those conversations shaped Kindred’s offer of money at 0%, that is patient and flexible, with payback in costed social as well as financial returns.
So how does that work?
Kindred starts with an invitation; to come along or have a go. Because if we feel unwelcome, or don’t understand the rules of the game, or the economy, it takes a personal invitation to get us there.
We don’t demand business plans or feasibility studies to be written first, because we aren’t looking for the best bid writers or mathematicians. We are looking for people with purpose, passion, and the ability to make it – whatever it is – happen. We call it action-led.
We invite action, to try things out and show what’s possible – to ourselves as much as anyone else. Those who turn up sometimes act alone, others collaborate; those who keep turning up become the next wave of local, homegrown, enterprises. They are entrepreneurs.
We encourage ideas to start small with one, or two. If two work, so might 22, or 2,000. We invest incrementally in what works. That’s market testing.
We get people involved through events, roadshows, social media and local press. We ask people to invite their friends, families, neighbours and haters. We print newspapers, put on exhibitions, tell stories and sing songs. We hold conversations, walk around places, hang about in cafes, social clubs, boxing clubs, and pubs. That’s how to start a movement.
And we share stories of local and social innovation. Stories from our pasts, and our futures. Stories from STOs across the river, and the world, to build our confidence and feed our imaginations. We dream together, imagine a different future together, then deliver it. Together. That’s co-creation.
There is no need to select, or judge, or ask people in communities to compete against each other. Economies need collaborators, not competitors. And action is the best selection process you could wish for. That’s non-competitive.
And when we need money to grow we join a conversation, or two, with our peers. Together, we decide if we are ready for growth and money. We come to our own, shared, conclusions on the risk we will take together. Some investing their lives and livelihoods into their dreams, others just supplying some money. That’s match-funding.
Then we invest incrementally, in what works, so it’s low risk for Kindred and low risk for social traders. If things don’t work, do less of it; if things do work, do more of it. That’s risk management.
Where there are affordable spaces to gather and grow, STOs collaborate. That’s how STOs, social clusters and whole economies, grow. That’s an inclusive economy.
And the really smart folks make sure that space is community-owned. So as value is generated it is captured, and reinvested, in the communities that created it. That could be called levelling up.
Does it work?
In Liverpool’s North Docks, the Invisible Wind Factory used social investment to turn an empty building into a night club and roller rink. Round the corner is Meraki, who learnt their trade on the bar of Invisible Wind, before having their support to set up a competitor/ collaborator club and venue, showcasing the region’s youngest talent. Nestled next door is Make North Docks, a makerspace and home to over 120 makers, painters, and fabricators. Others joined in along the way and, together, they have turned the former no-go Dock Road into a day and night-time destination. Of the first 16 ventures a pre-Kindred pilot invested in, 87.5% are still trading – in some form or other – seven years later.
Over in Birkenhead, a handful of socially-trading organisations emerged from a Festival of Ideas. They initially shared just £12,000 to get going, bring people together, walk around, test things out, run a festival, open a café, hold a forest school. In 2021, five of those organisations received a collective £200,000 Kindred investment. In less than two years they doubled their turnover to £1.3m, more than doubled their employees (creating 50 new jobs) and levered over £9m into their growth and expansion.
More importantly, others have joined in. In 2021 local Band She Drew The Gun wrote a song, as part of ⇨ leftbanksoundtrack.org about Argyle Street, home of new music venue futureyard.org Yard in the heart of Birkenhead. It narrates the street’s current activity and empty spaces. Here in 2023, the voids are gone, others have joined in, opening new bakeries, potteries, and co-working cafés.
And over in St Helens a book shop, a café run by refugees drawing on their global food offer, and a community café and local history hub where nobody leaves lonely, and a peripatetic forest school are all growing their social impact with Kindred investment. A mental health project – disguised as a gym – welcomes addicts, the anxious and the excluded alongside the muscles and machines.
An Ideas Festival culminated in the published St Helen’s Social Trader and 21 previously disconnected or latent entrepreneurs are now growing their own, hyper local, kindred spirit.
Price for risk? With an 87.5% success rate and a catalytic effect on other businesses and property prices, we think Kindred is a pretty safe bet.
If you want to be a Kindred Spirit – as an investor or a place-based changemaker – get in touch. We can’t help for free, but we can promise to leave you fully equipped to run your own, local, version of Kindred and that’s the best value.