Investing in Liverpool City Region
In 2019, we teamed up with Liverpool City Region Combined Authority and local social economy leaders to form Kindred, an independent CIC providing repayable, interest-free money to STOs. It is a truly collaborative project, having been developed by and with over 150 socially-trading businesses across the region. Kindred’s unique advantage in the social investment space is that STOs can decide on the combination of funding that meets their needs. Because of this, the competitive nature of social investment is lost.
Kindred’s philosophy is ‘pay back and pay forward’. Businesses invested in by Kindred in turn reinvest back into the fund so that other businesses can benefit. The collaborative investment process develops an ongoing relationship with and between local STO investees, further strengthening the social sector in Liverpool City Region.
As the lead partner, Power to Change played a unique role by bringing expertise in governance, organisational development, investment and venture support to incubate Kindred’s organisational development. We also facilitated the relationship between the sector and the Combined Authority, as well as bringing robust accountability and credibility to Kindred’s governance.
In July 2020, Metro Mayor Steve Rotheram pledged £5.5M in support, which Power to Change matched with £1M. Kindred soon became fully operational from autumn 2020, after being fast-tracked at the start of the Covid-19 pandemic. The first investments in local community businesses began in early 2021.
Our region’s socially trading sector is the hidden engine of our economy, worth nearly £3bn a year and employing 50,000 people. I’m keen to support it and help the sector continue to grow and flourish. But I know that I don’t have all the answers. I’ve worked with the sector and Power to Change to design and launch Kindred. It’s a radical new venture, owned and run by the sector and shaped around their needs and ambitions. I’m sure that we will see our investment repaid many times over through the contributions the social economy will continue to make. Many of these organisations represent the best of our region and its values. I’m glad we’re able to help them thrive.
The funding – ranging from £10,000 to £70,000 in interest-free loans – is designed to increase the impact of these organisations and help them to diversify their activities. STOs may also have the option to repay money partly in social value, meaning that money could be repaid by demonstrating their social impact.
This more holistic type of support has not historically been available to social economy organisations, whose needs have been conflated with those of traditional commercial businesses.
The Kindred Working Group has proved vital in the CIC’s formation and success. The group, made up of Power to Change staff and LCR-based social economy experts Helen Heap and Erika Rushton, led the co-design of the new organisation and made executive decisions during the development phase. In a non-hierarchical fashion, members took on roles according to their skills and experience.
The Group also set up a procurement process and secured Social Finance as a lead partner. Social Finance joined the Working Group in the pre-development phase, and one of their directors sat on the interim board.
Impact so far
£6,500,000 has been committed to Kindred over the first seven years, by LCR Combined Authority and Power to Change. The first £1m of that money was invested in early 2021 in our ‘pilot’ round. Seventeen Further rounds are now being invested.
So far, Kindred has engaged with 110 STOs. 65 of the 110 STOs we are working with are female-led (71%). Approximately 52 of the 110 STOs we are working with are Liverpool-based (56.2%). 25 of the STOs we are working with are Black-led
Kindred is a real example of how collaboration, co-production, co-design and skill-sharing can address challenges in the social sector. Its unique formation and execution are paramount to its success.
Black and Brown-led Social Traders (BlaST) Network
While developing Kindred, the co-founders including Power to Change recognised that organisations led by and for minoritised communities are generally less likely to access social investment. Tackling this issue was therefore a key priority during the creation phase of Kindred.
In November 2020, Kindred worked with BlaST founding member Joanne Anderson to secure funding from the UnLtd Inclusive Recovery Fund to develop the Black and Brown-led Social Traders (BlaST) Network. Its mission is to increase social impact and help accelerate change to address inequalities.
More on Kindred
