The JESSICA (Scotland) Trust and Resilient Scotland Ltd Year One at a glance

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1 The JESSICA (Scotland) Trust and Resilient Scotland Ltd Year One at a glance

2 About the JESSICA (Scotland) Trust & Resilient Scotland Ltd Background In September 2011, Foundation Scotland, formerly the Scottish Community Foundation, accepted an award from the Big Lottery Fund to endow a Trust, the JESSICA (Scotland) Trust ( the Trust ), as a source of funding and finance in Scotland for community-led regeneration projects across 13 central and lowland authorities in Scotland.. The Trust was to be endowed with a Big Lottery Fund grant of 15 million and its purpose was to help stimulate growth in disadvantaged communities most affected by serious economic decline and market failure, helping them to become stronger and more sustainable through their own efforts. Subsequent to the research and development work undertaken by Foundation Scotland, and supported by legal advice from Burness Paull & Williamsons, formerly Burness LLP, the JESSICA (Scotland) Trust became a charitable Trust established by Deed of Trust. The Trust received charitable status from OSCR on 23rd March Establishing Resilient Scotland Ltd Endowing the Trust involved developing a new organisation that would serve as the Trust s corporate Trustee. This entity, Resilient Scotland Ltd ( Resilient ), was incorporated in November 2011 and received charitable status on 7March Resilient has responsibility for the approval of strategy, annual objectives, capital and revenue budgets, changes to professional advisers and the grant and loan distribution mechanism. It also has responsibility for approval of policies such as investment, grant and loan making, risk assessment and the reserves policy of the Trust. During this first year Resilient has focused on establishing governance arrangements and beginning to deliver the strategy originally outlined in the Business Plan and accepted by Big Lottery Fund. During this period Directors themselves have developed a greater sense of ownership towards the Trust and its objectives and brought to bear their own experience, opinion and knowledge. This has been a significant process with a Director team who wish to be guardians over a strategy that is both innovative but also achievable. The Big Lottery Fund appointed a Trust Protector in August 2011 who has responsibility for the integrity of the Trust s administration and the propriety of its procedures.

3 Management The day to day activities of the Trust continued to be managed by Foundation Scotland but under contract to Resilient. Foundation Scotland has sub-contracted further delivery partners; Scottish Community Alliance (SCA), Social Investment Scotland (SIS) and the Scottish Urban Regeneration Forum (SURF). Managing the Investment The Board of Resilient delegated the development of its Investment Policy to its Investment, Finance & Audit Committee and which includes representation from Foundation Scotland s Finance Committee. Resilient agreed an investment strategy that places an emphasis on low risk investments, due to the ten year time frame within which to spend down the Trust s resource. The policy also includes the scope to invest in higher risk assets aimed at improving overall long-term returns if circumstances make this option appropriate. The investment objective for the fund is to meet the approximate planned drawdown schedule with a very high level of security, at an acceptable cost and whilst maintaining adequate levels of liquidity. Programme Development Resilient has refined and implemented the Trust s first programme. Alongside this, the focused engagement work in Govan and Coatbridge has highlighted the degree of support and investment required by some organisations in order to begin considering the risks and opportunities of social finance. A critical challenge ahead is making this a more palatable option to community organisations with the appetite and ambition to entertain finance rather than just funding. Start & Grow Start & Grow has enabled the Trust to begin investing directly into community organisations. The programme is a readily available investment opportunity, developed to provide immediate mixed grant and loan support. This new finance product is available to any non-profit-distributing or asset-locked organisation with social or environmental aims clearly stated in its governing document and operating in any of the 13 local authority areas eligible for European Regional Development Fund (ERFD) support. 1 These are primarily urban and peri-urban communities identified through the SIMD as most challenged 1 These are the areas selected according to their Scottish index of multiple deprivation score and generally understood to be of greatest disadvantage in Scotland: Clackmannanshire, Dundee, East Ayrshire, Edinburgh, Fife, Glasgow, Inverclyde, North Ayrshire, North Lanarkshire, Renfrewshire, South Lanarkshire, West Dunbartonshire and West Lothian.

4 by economic circumstance and most in need of additional regeneration efforts. Applicants need to be seeking repayable investment and have a demonstrable potential to generate income in order to repay a loan over a short term. Between June 2012 and March 4 awards were made (see Appendix 1). Towards more targeted investments in communities Scottish Community Alliance piloted an engagement methodology in Govan and Coatbridge. The process discerned appetite amongst local community led organisations for mixed grant/loan investment with a view to a potential investment from the Trust. The work involved a series of discussions with local community led organisations to review the viability of enterprise activity that was already underway and/or asset and enterprise development activity that is in the pipeline. Initial scoping reports highlighted current issues and opportunities for local organisations regarding potential growth, development and investment. Moving Forward It has been a challenging and stimulating year during which the Board has become established and had the opportunity to consider the Trust s potential across the combined landscapes of social investment and community-led regeneration in Scotland. Even in these times of increasing financial austerity Resilient has begun to and nurture community driven initiatives within some of Scotland s poorer communities with combined elements of repayable and non-repayable finance. However whilst some of the concepts of the original ambitions remain relevant, the way we can achieve this, given current market conditions, is being reviewed. In a recent paper on social investment in the UK, Shining Armour or Sheep s Clothing, Mary Duffy makes a call for a debate on the cultural fit of social investment and funding that grows success and encourages risk taking. As an independent Trust, the JESSICA (Scotland) Trust is well placed to contribute to both these opportunities. Through an evidence based and collaborative approach (or thinking with muddy boots as described by Carnegie UK Trust) Resilient looks forward to influencing emerging social investment practice to address the multiple challenges facing some of Scotland s poorer communities.

5 Appendix 1 Table 1: Year 1 Start & Grow Awards Organisation Area Award Made Stepwell Consultancy Ltd Himalayan Centre Edin Ltd Next Step Initiative UCAN Learn Work Live Greenock, Inverclyde Leith, Edinburgh Govan, Glasgow Kilmarnock, East Ayrshire. January January March March Amount awarded 60k (Grant 20k/Loan 40k) 60k (Grant 20k/Loan 40k) 51,212 (Grant 17,071/Loan 34,141) 40k (Grant 13,333/Loan 26,667) Award will.. Refurbish units to create café/bistro with new kitchen, seating for 30 covers and take-away area. Create one new post and secure three current posts Establish new café and commercial kitchen within Centre for Himalayan Arts. Restaurant and centre will provide 11 new jobs, as well as training opportunities. Provide shared workspace, virtual offices, call centre and printing facilities to small businesses, particularly to African community. Create jobs, provide training, encourage entrepreneurship. Buy vehicles and provide working capital for startup training for work centre for young people with learning difficulties failed by mainstream education & training. Create two jobs, secure two current posts.