Frequently Asked Questions

1. What is the North East Social Investment Fund?

The North East Social Investment Fund (NESIF) is a £10.2m repayable fund available to Social Enterprises in the North East of England.

NESIF has been funded by Big Society Capital, Northern Rock Foundation, Esmée Fairbairn Foundation, Joseph Rowntree Foundation and Northstar Foundation. Being repayable will enable the fund to recycle the monies, thus benefiting a wider number of Social Enterprises over a longer period.

The fund will make investments over a 10 year period to sustainable Social Enterprises who are looking to improve their social impact.

2. What is the NESIF application process?

We encourage early discussions, even before you are ready to apply, as these can often save time in the long run.

When you are ready, our process involves submitting an Expression of Interest form and submitting this with your business plan, historic financials and financial projections.

We will then make contact to visit you and understand more about your organisation and what your plans are to complete our assessment.

We will work closely with you to progress your application and tailor the investment to meet your needs.

We are also an approved Access Reach Point which means that if we feel you need additional support in order to secure social investment, we are able to support your application to the Access Reach grant fund. You may be eligible for a small amount of grant funding to enable you to undertake the required investment readiness work.

3. How much can I borrow?

We will normally lend amounts between £100,000 and £1m. In certain circumstances, we may be able to lend more than the upper limit.

4. What can I borrow the monies for?

Monies can be used to develop your organisation further. This can be for operational costs, working capital, support the purchase of an asset or, a combination of purposes.

5. My organisation is a Charity, can we still borrow money?

Yes, however it is important that your organisation understands that Charities must adhere to certain regulations when borrowing and granting security for borrowings. In addition, it is helpful to ensure that your appointed solicitors are familiar with acting for Charities as some of the requirements by law are a little unusual.

However, it is important that your organisation does not borrow more than it can comfortably repay. We are always available to discuss any concerns you may have with regards to borrowing.

6. Will Northstar Ventures require security to be taken on the loan?

We will seek to take security for the loan where appropriate, which may involve securing property you already own or lease or a property you are purchasing with the loan. However, we do not seek personal guarantees.

Taking a security over property acts as a safeguard for us as it means that, should you fail to make repayments under the loan, we have the right to take on and sell the property. Think of it as being like the mortgage you may have over your own property at home, the principle is just the same.

7. How many years can I spread a NESIF loan over?

Our social investment loans can normally be repaid over any period up to 10 years, we expect in most cases our loans will be for terms of between 5-7 years.

The term is fixed at the start of the loan. One of the major benefits of our loan is that there are no penalties for early repayment.

8. What is Social Impact?

There are many ways to look at the impact you make with the work that you do and the people you are in contact with. Basically, Social Impact can be described as the difference an activity within your organisation can make on the community which you serve and also how you achieve that difference.

For example Social Impact can be looked at through:
a. Outcomes – would look at how your business delivers a significant difference to the lives of beneficiaries AND where a typical beneficiary experiences marked disadvantages in life without the intervention
b. Organisational Capability – would look at your leadership capability, systems and data, organisational processes, resources (human and physical), strategy and planning, delivery and execution
c. Additionality – Looks at what your proposed activity will add to your existing activities
d. Alignment – looks at how the underlying drivers of your business performance and impact performance are identical, or correlation is high such that actions or activities that deliver greater impact will also drive financial performance.
e. Mission & Governance – Looks at your ESG drivers
i. E: energy usage and associated costs, waste and water use, brand or reputational (dis)advantages from environmental practices.
ii. S: HR or employment practices affect staff turnover, delivery quality, and recruitment & training costs; supply chain management; community engagement programmes
iii. G: quality assessments, anti-bribery and corruption policies; strict reporting & accountability structures; particular focus needed on sectors working with vulnerable people (e.g. care, early years)

9. How can I measure the Social Impact?

There are many reasons why it is useful to understand the impact you are making and wish to make with any new or enhanced service:

a. Start with understanding where you are now, your “base” position. Do this by surveying a sample of all that come into contact with your organisation:
i. your beneficiaries
ii. your staff
iii. your trustees
iv. your funders

These “stakeholders” will give you feedback on what goes well, what they miss, and the impact they have felt by being a part of your processes.

b. Be open-minded: do not go into the process defending your idea. Think about how you can take what you learn from impact assessment back into the operation of your Social Enterprise. Use the value from the process to inform your strategy, operational model and business plan. Make evaluation a way that you work not a stand-alone process.

c. It is not necessary to measure impact using expensive tools, this will depend on how you intend to use the information, for example such information can be useful to:
i. Demonstrate your Unique Selling Point (USP) when looking for new contracts
ii. Inform and enhance your annual reports

d. Be careful if you use a monetary value for your Social Impact i.e. £1 of costs creates £4 of Social Impact. There are many ways to measure impact and similar organisations to your own may not use the same criteria as you and end up with a much higher social value, which if compared could be mis-interpreted. It is thus perfectly acceptable to use numbers of individuals or even percentages of individuals to benefit from the services you provide to demonstrate your Social Impact.

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