Futurebuilders England Fund

Futurebuilders England was a ground-breaking, Government-backed £142m social investment fund that provided loan financing to social sector organisations in England to help them bid for, win, and deliver public service contracts. Futurebuilders was the first social investment fund in the UK.


Who did the fund help?

This is your average loan recipient:

Futurebuilders provided a means for social sector organisations to access flexible, long-term investment products that are not readily available from commercial banks or private investors.





Total assets:








How did the fund work?

The fund breakdown


27 loan-only deals

26 unique organisations


189 grant-only deals

183 unique organisations


179 blended deals

175 unique organisations


Loan components


Grant components

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What makes social investment work?

Futurebuilders demonstrated how patience and flexibility in investment can effectively support the social economy at scale, while providing modest financial returns for areas most in need.


The average loan length was 13.9 years, with longer loan terms corresponding to higher returns.


Financial and non-financial variations were applied to a significant number of investments, representing the long-term commitment to supporting investees through difficult times. A variation could be a repayment holiday, or a change in loan purpose.

Investing where most in need

Over 40% of investment was disbursed to the 20% most deprived areas in the country, ensuring social impact objectives remain at the heart of social investment decision-making.

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What have we learnt from Futurebuilders?

Our analysis of the Futurebuilders portfolio has provided answers to longstanding questions around ‘what makes social investment work’. In particular, there are six key lessons to be drawn from the Futurebuilders experience...

1. It creates long-term employment:

Social sector organisations are productive and enterprising – This investment approach could work efficiently to generate jobs, grow incomes and create fairer employment. Our data shows that three years after receiving Futurebuilders investment, organisations increased their employment figures by 16%, and wages increased alongside business growth.

2. It improves the financial performance of charities and social enterprises

Key indicators of financial performance - such as Turnover, Net Assets, and Cash – all increased for 3-4 years after receiving Futurebuilders investment; ultimately reaching a new and higher plateau. Following investment from Futurebuilders, charities and social enterprises have also been shown to be more sustainable, with profit cycles showing as positive on balance.

3. It generates tangible financial returns for investors:

Of the £144 million invested, £98 million has already been returned (with the Fund still with 16 more years until closure).

4. It supports more affordable investment offers:

Larger grants by proportion went to smaller organisations; this kind of subsidy enables smaller organisations to take on investment and become stronger and more resilient. Subsidised loan rates were 2.14% based on initial offer terms (smaller if considering the financial interest rate variations offered during investment management).

5. It needs subsidy to be most effective:

The IRR on loans is 1.2% at time of writing, which is anticipated to rise. This has been subsidised by long-term business support and portfolio management costs: if these are taken into account, the IRR is around -8%. This subsidy has been essential to achieving the financial performance, employment growth and impact detailed elsewhere.

6. It absorbs risk through subsidies:

Operating on small profit margins (with maximum median profit at £30k), subsidies through variations, flexibility, use of blend and longer time horizons, have kept write-offs and provisions at only 17% (in 2019), against an original target of 25%. Despite the purpose of Futurebuilders being one of higher risk, specifically to test use of repayable finance in the third sector, the fund has exceeded expectations in terms of financial performance.

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The Future

What's next?

COVID-19 has exposed the need for a new approach to how we invest in places and people.

The pandemic has exacerbated inequalities between and within communities. The places that were already at-risk – due to levels of deprivation, job insecurity, or low wages – will struggle to bounce back.

In the recovery, the social economy must and will play a vital role in helping the hardest hit places to rebuild.

A blended social investment fund on the scale of Futurebuilders has not been repeated in the market since. It is important that these learnings from Futurebuilders and other available data sets are used to make new patient, flexible funds fairer and more effective for those most in need.

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