What happens when you invite people excluded from something to redesign it? We design it to include ourselves.
Kindred, in Liverpool City Region, is a powerful demonstration that our lived experience of exclusion from money makes us experts in the changes needed for a fairer, more prosperous economy.
When Power to Change become Kindred’s first funder five years ago, they backed more than an organisation or fund. They invested in an invitation, to Liverpool City Region’s social traders, to demonstrate what happens when people who’ve been shut out of an economy are trusted to build one for themselves.
We knew what didn’t work: application forms no one could understand, business plans consultants wrote, processes that treated risk as a flaw – rather than a fact of life. And our faith in the latest inward investor, or grant from Government, to deliver promised jobs and prosperity was long lost. We didn’t want our poverty mapped or our needs met; to be consulted or researched – again. We wanted our ambitions invested in so we could contribute, have value, create our own future.
We invited ideas. Answers on a postcard – no business plans required. Feasibility studies took the form of pop-ups. Collaboration replaced competition. Eligibility criteria were: turn up, find a way, care enough, make a difference.
A group of young street runners were some of the first to turn up with their passion. Once they had access to a warehouse, 1,000 young customers were turning up weekly within a year. If we had talked ‘NEETs’ they would have run – artistically – away.
I was invited to hold a conversation about the future of Liverpool’s economy. I was expecting 20 people for a modest civic debate on ‘Homegrown Business’. Over 100 social entrepreneurs from across the region turned up – standing room only. That night, Power to Change’s then-CEO Vidhya Alakeson stayed until the end and nearly missed her train. I gave her a lift to the station and she said, “we want to help build this”, offering an initial £1m if we could make a business case and raise local match funds.
We hit the road across the city region, commissioning local activists and animateurs to ask ‘What if…? If this was our money (although we had none at the time!), what would it look like? What terms would we take it on? Who would judge us?’
Together, 150 social entrepreneurs – people who couldn’t access the ‘social’ investment available nationally because they didn’t have a track record, an asset, or a £300K turnover – redesigned the money to work better for all of us and the economy we share.
Contrary to popular belief, it’s those with very little, not those with a lot, who are the real experts on money. We make a little go a long way.
Kindred was launched in 2021 with £1m from Power to Change and £5.5m from Metro Mayor Steve Rotheram and the Liverpool City Region Combined Authority. Their investment in Kindred – in us – represents a rejection of trickle-down economics. Power and policy were passed to people with lived experience and trust was placed in the ingenuity of people in Liverpool City Region to build and rebuild our own economy.
Collectively owning and investing our wealth
Kindred is a fund, yes. But, more importantly, it’s a community-designed economic system. A demonstration of what happens when money flows differently and wealth –created in and by communities – is collectively owned, shared and reinvested.
Kindred provides 0% interest investment to socially-trading organisations (STOs) – ventures trading commercially for social good. Investments are non-competitive, decisions are made by peers and repayments are made in both cash and social returns.
In just five years, Kindred has made 61 investments, of which 51% have gone to women, 31% to Black and ethnic minority social traders and 100% to those without access to other money.
Kindred investees are growing by 20% year-on-year across the portfolio, with longstanding investees hitting 55% annual growth – well above OECD’s 20% high-growth threshold. With the right money, in the right place, at the right time, we are not unproductive or market failures – we are living, breathing growth opportunities.
We have, between us, created 200 jobs in places crying out for employment. Places of low productivity, where we’re hiring people from ‘outside the labour market’. This is where we live and do business, and these are our friends and neighbours. We see the impact directly in our community.
With growth, our demand for space has grown, so we have brought £16m worth of underused property and land back into use to date. Creating value where there was none. As 70% of us need more space, we are setting up a community property holding company so the value we create isn’t extracted, but retained and reinvested by us and in us.
This way, derelict buildings can become testbeds for youth music scenes. Community bakeries become training grounds for the unemployed and ex-offenders. Old garages transform into food-growing start-ups. And garden sheds become therapy rooms for peer-to-peer mental health services.
BlaST – the Black Social Traders’ network – set up by Joanne Anderson, began as a group of 25 Black and ethnic minority people with an idea. We said ‘we trust you, have a go’ with a development award of £500 to £2,000. Five years later, Cycle of Life became the first STO to fully repay its loan, and BlaST has 250 members. At the last BlaST meet up, The Florrie’s Anne Lundon described the 92 homes and 11 commercial units she is about to sign off on, and encouraged others to think big! ‘Credit’ originally meant to have faith, believe, and trust in another. Without it, Kindred money might still be sitting in the bank. With trust in each other, Kindred money is repaid so the next, and the next, STO can grow.
We co-locate and cluster together. And just like in industry clusters, the pace of innovation is accelerated. But our clusters aren’t driven by the traditional UK Standard Industrial Classification code sectors. We grow from a common cause – in food, culture, creativity, care, energy, sport and health – in living here. STOs are finding new ways to solve intractable problems of food security, mental health and hospital bed blocking.
A former child carer imagined a dementia centre that cared for the whole family – as she dreamed of. This year, she opened her second dementia day centre, the Me2u Centre, full of gardeners, dancers, storytellers and hairdressers. If we wait for a government to reform adult social care, we could be waiting forever.
Social clusters give places a new purpose and unique identity, and some are attracting up to 2000% other economic activity, to places formerly labelled ‘deprived’ or ‘left behind’.
We’re not 150 STOs anymore. Our membership has escalated to 1,500 STOs across Liverpool City Region who are no longer satisfied with ‘just’ alleviating the impacts of poverty. We aim to trade our way out of it.
There’s an abundance of latent entrepreneurship in every place, just awaiting an invitation.
As word of Kindred spread, more and more people wanted investment, and we worried out loud that we didn’t have enough. But the latest roomful of emerging STOs didn’t get competitive or opt for winners and losers. They proposed to share what we had and support each other to make more. Now that’s the kind of economy I want to live in.
Kindred’s 1,500 STO members – people with lived experience of financial and economic exclusion – know the blockers and barriers and the system changes required for an inclusive economy, because they navigate them. They are experts – building systems based on mutuality, not scarcity; where we don’t measure outputs, we grow impact – £39 million, £13 for every £1 of it to date. A fair return on investment.
Kindred economies are built on trust, and our accountability is to each other.
A people-centred economy
Kindred isn’t radical. It costs far more to exclude people than to include them; far more to drip-feed poverty than to fund potential. Kindred is a rational industrial policy that takes account of the evidence built over the past 30 years.
Research by the Heseltine Institute shows that the social economy makes up 10% of the Liverpool City Region’s economy, and STOs, capable of radical growth, provide 5% of the region’s jobs, invariably in the places most in need of jobs. Knowing that Liverpool City Region is home to 10% of England’s most disadvantaged communities, scaling Kindred and the social economy will deliver wealth and employment where they are needed most, replacing an increasingly anti-social economy with a more Kindred one.
Kindred, along with eight other regional partners, is now working to secure £50m in devolved social investment for a Social Investment Pathfinder. That’s less than 10% of the social investment already released by the Government, intended to transform the fortune of disadvantaged communities, but we can do a lot with a little!
We are calling it a ‘Pathfinder’ because we are just one in a patchwork of places across the country, stitching ourselves together, testing out economic alternatives, sharing our ambitions for an industrial strategy that delivers a wholly social economy in the UK.
The funding exists. The real question is not where it’s used, but how it’s used. Will decisions rest with those within the system, whose expertise comes from managing and protecting wealth? Or those outside it, whose lived experience of poverty and exclusion makes them the real experts.
To Power to Change, we say thank you for your trust five years ago. For backing Kindred before we had a perfect model, or a glossy prospectus, while the answer is still unfolding. Power to Change understands that communities are not recipients of social policy. We are the designers and practitioners of our future economy, in which everyone has a share.
The economy doesn’t happen in Westminster or Whitehall. Economic experts don’t just sit in Deloitte or McKinsey. And bankers are no good at money or we would all have some by now.
The economy as we knew it has left the building. We are the economists now.
