Bristol together

Bristol together

Bristol Together CIC aims to create full-time jobs for long-term unemployed people, particularly ex-offenders by buying and refurbishing empty properties. Triodos Bank helped Bristol Together raise an initial £600k through a bond and a further £1 million from a wider range of investors, principally trusts and foundations. The bond was structured to attract Community Investment Tax Relief (CITR) which can enhance returns for private investors. Bristol Together are now delivering against their ambitions, working in partnership with other local social enterprises. The model is now being replicated in the Midlands with the help of The Cabinet Office’s Investment and Contract Readiness Fund, and being considered in other areas.

Before the investment

Bristol Together CIC was launched in October 2011. The organisation’s aim is to create full-time jobs for long-term unemployed people, particularly ex-offenders. The business buys, refurbishes and sells empty properties while also creating full-time jobs for people who have been in prison. Bristol Together buys empty properties and works with partners to employ ex-offenders to undertake the repair and refurbishment. When the properties are restored they are then sold at a profit with profits reinvested back into the mission of the business. 

The ambition is to help and support more disadvantaged and socially people achieve their potential. A criminal record can make it harder for people to find jobs and Bristol Together aims to make it easier and demonstrate how people can turn their lives around. Bristol Together expects to work with up to 200 ex-offenders and other long-term unemployed over the next 5 years. Bristol Together are also developing a mentoring service as part of their work, in order to ensure that employees have as much support as they need to make the next step towards living a more stable and fulfilled life. 

Bristol Together CIC works in partnership with other local social enterprises, such as The Restore Trust and Aspire. The Restore Trust was founded in January 2010 with a mandate to provide skills, training and jobs to offenders in the Bristol area. Aspire has worked for 10 years to give job opportunities to people normally excluded from the job market. Together, their aim is to bring over seventy empty properties back into use over 5 years. Each renovation is co-ordinated by a Project Manager whose job is to manage costs, keep the renovation on track and support the staff. 

Paul Harrod is the founder of Bristol Together. Paul explains how he was “searching for a way to address a clear social need – creating jobs for ex-offenders with multiple disadvantages, particularly in the current economic climate. Currently, around 28 people compete for every entry level job in the UK market. For most ex-offenders, a combination of a criminal record and lack of employment experience means the odds of finding meaningful employment are insurmountable. Our new scheme provides the double benefit of being dedicated entirely to getting them back into the workplace and equipping them with new skills, while successfully redeveloping out-of-action, run-down properties in desperate need of renovation.”

Why invest?

Paul Harrod approached Triodos with the idea of employing ex-offenders to add value to empty property and initially worked with the corporate finance team at Triodos to raise £600k.  The business model relies in part on the investment. By issuing a bond, the business is able to have cash in the bank up front that makes buying property easier and cheaper. 

Lydia Westmore, Corporate Finance Manager at Triodos explains how Triodos saw Bristol Together as “an exciting example of how a sustainable commercial business model can be harnessed to create a social impact. We were confident that the project would appeal to our investor base of private high net worth individuals and charitable foundations. Bristol Together is an excellent example of a business that can deliver both a social and financial return and as such is an ideal Triodos corporate finance client.”

Triodos Bank is an independent bank founded in the Netherlands in 1980 and the UK office opened in Bristol in 1995. Triodos Bank only finances enterprises which “create social, environmental or cultural added-value”.

The initial round of finance which was intended to prove the business model was provided by the Esmée Fairbairn Foundation and Andrew Street, who chairs Bristol Together. Andrew had a personal connection with the project while Esmée Fairbairn Foundation is one of the UK’s leading progressive foundations and at the forefront of the social investment movement.  The Foundation’s Finance Fund aims to invest capital to deliver both social and financial return and has played a role in supporting many of the UK’s ground-breaking social investment deals.

The investment

The full bond issue subsequently sought investment from charitable foundations and private high net worth individuals (HNWIs). The investment was structured as bond, paying interest quarterly and capital repaid after five years. The second round of capital raising attracted £1 million in May 2012. This money provides enough capital to finance the purchase and refurbishment of empty properties. The bond pays 3% interest p.a.

The majority of investment comes from institutional investors such as the Esmée Fairbairn Foundation, Lankelly Chase and Barrow Cadbury Trust and less than a quarter from individual private investors, several of who were very engaged with the project and even on the Board. 

Why structure the investment in this way?

Triodos Corporate Finance has significant experience in helping organisations which seek to deliver positive social, cultural or environmental change to raise capital. Triodos helped to structure the bond and putting together the bond’s investment memorandum. Triodos explain how being “able to offer investment through a simple financial instrument like a bond makes it easier to attract investment. Investors want to be able to invest simply and to know that their investment is having a positive social impact. The bond offered by Bristol Together is a simple tool to attract investment.”

Triodos was able to structure the investment in a way that attracted Community Investment Tax Relief (CITR) which provides an incentive for investors to save money on their tax bill through their investment. This means Bristol Together becoming accredited as a CDFI (Community Development Financing Institution), an innovative step to take as part of the financing round. Lydia Westmore explains how the CITR helps: "We think that it will be able to issue a bond with a considerably lower rate than a normal first-time corporate bond, particularly because the use of CITR, and the asset-backed nature of the bond, makes it quite an attractive proposition."

Impact of the investment

The organisation has already helped more than 60 people into work and by April 2014, the combined sale prices of properties refurbished by Bristol Together was over £3 million. Many of these properties had been empty for more than two years. 

Bristol Together are also delivering on their ambition to give ex-offenders another chance and to help them fulfil their potential through reconnecting them with the labour market. The national average re-offending level is 26% but far lower among ex-offenders working with Bristol Together.  The enterprise was chosen as ‘Start-up Social Enterprise of the Year’ in 2012 in the national social enterprise awards by Social Enterprise UK.

The investment has already had a wider impact, beyond Bristol. Bristol Together continued to work with Triodos Bank to explore how the model could be replicated elsewhere in the UK. So in 2012, the two partners hosted an event with a range of social enterprises from across the UK to explore the potential for creating more jobs for socially excluded people through the same business model. This was a chance for other organisations to learn more about Bristol Together and to explore potential for future collaboration. 

This helped lead to the creation of Midlands Together CIC which secured a grant of around £150,000 from the government’s Investment and Contract Readiness Fund (ICRF) with the view to raising a further £3m through a similar bond issue to Bristol Together, again working with Triodos. £3 million pounds has now been raised and the plan is to renovate over 70 vacant properties in Birmingham, Staffordshire, Worcestershire and the West Midlands.

Risk and mitigation

One significant risk was that this was essentially a start-up organisation with no track record. This was why the investment was structured in two tranches, first to prove the concept and then second to deliver the business plan. The ICRF has also helped. Dan Hird from Triodos says that “Many charities and social enterprises that we work with have strong and credible growth ambitions but are not in a position to take on external social investment. Since its launch last year, we have found that the ICRF has played a vital role in funding the required investment readiness work that precedes a capital raising. As a result, the ICRF is becoming an important element in the growth of the social investment market in the UK.”  The ICRF has invested several million pounds to support social enterprise to raise hundreds of millions pounds of investment. 

Another risk is around the UK property market, which is relatively volatile compare to other countries. Hence, Bristol Together’s model involves a quick turnaround of property purchase, refurb and sale, limiting their exposure to changes in property values over time. The model also relies on good working relationships between project partners and Paul Harrod played a critical role in bringing the partners together on the right terms.


Midlands Together CIC is now building on the experience of Bristol Together to replicate the model. The Midlands Together bond offers an annual fixed return of 4% to 6% secured against the company’s property portfolio, again also with CITR available, which could enhance returns up to 12.5% for corporate investors and 15.1% for highest rate (45%) taxpayers. Midlands Together plan to buy and refurbish around 15 properties every year for five years and invest over £2 million into salaries and support for over 100 ex-offenders.

"It is wonderful news that Richard and the team have been so successful in raising new investment capital" said Paul Harrod. "We look forward to seeing the impact they will have, and the contribution made by our social enterprise partners in the West Midlands."

Richard Nicol is the new Chief Executive of Midlands Together. He explains how investment readiness support was critical to success said:  "Taking the ‘Together’ model to the next level, in a new area, has required further research and development, just as you would expect in any expanding business. Having investment readiness support to do this thoroughly and professionally has been key in making the most of the opportunity, in what some might describe as an emerging market. The support has allowed us to target potential social investors and present them with information on how to invest and the returns available. The results so far are very encouraging with many new social investors coming on board for the first time." Other areas, including Leeds in Yorkshire are now seriously considering replicating the model.

One further lesson from the model is the extent to which harnessing tax incentives can help investment in social enterprise stack up. The use of CITR in this case was highly innovative and could be replicated further but this example has also helped generate further understanding of how the new Social Investment Tax Relief (SITR) tax relief may also help other investments make sense both in terms of social and financial return. 


Text: Dan Gregory, Head of Policy at Social Enterprise UK

Source: “China-UK Social Enterprise and Social Investment Case Studies” publication