The Rise of the North

Given that we’re based in London, Pioneers Post tries hard to ensure that we cover all points of the UK and indeed, as much of the world as we can. With around 20% of UK social enterprises based in the capital and most of the country’s media based here, it’s fair to say that coverage can be a little biased towards ventures in and around the big smoke.

The north has been pretty effective at generating headlines recently though. Back in August we reported on the 83 social businesses on the SE100 in the North West that generated over £700m turnover last year. According to the Community Development Finance Association, the biggest and most prolific regional social investor in the social economy is Key Fund, based in Sheffield. 

Key Fund was started in South Yorkshire in 1999 at a time when the region was suffering due to the demise of the steel and coal industries. Initially their remit was to deliver small social capital grants from European Funds to stimulate social cohesion and give the local economy a boost. By 2008 they had invested £18m in 1600 organisations and started to expand their operations to cover all of Yorkshire and the Humber region. Just two years later they grew again to cover the whole of the North of England, also heading south for the first time to cover the Midlands. Today their average investment is around £42,000 and they’ve invested £40m in over 2700 organisations. Perhaps most importantly, 2900 jobs have been safeguarded during that time. 

One of the organisations that they’ve helped is Treestation, based in Manchester. Starting out as a provider of sustainable tree work and firewood, they now provide all manner of wood related services.  The UK imports three quarters of all the wood that is used as fuel and the transportation of that obviously leaves a pretty hefty carbon footprint. Treestation use locally produced sources as much as possible – essentially, if they are asked to come and chop down a tree, they’ll make it into something useful or beautiful or sell it as firewood.

The environmental ethics go much further though. They’ve used LED lights wherever possible at their office, their kitchen is vegetarian and if staff have to visit clients they ask them to find the most fuel efficient route and avoid stopping off at the office first unless absolutely necessary. Treestation employ 25 people and have a turnover of £450,000.
Wood fuels are a low carbon form of energy. Wood taken from fast growing forests that are regularly replenished is a good thing; the trees take up carbon dioxide as they grow, so are carbon neutral when they are burnt. 

Key Fund invested in Treestation with a £65,000 loan, which will go towards the purchase of a bio mass boiler and a wood drying kiln. For Treestation, bio mass is the woodchip that is a by-product of the work they do; burning that in the boiler powers the heating system of the kiln to remove moisture of wood so that it can be sold as firewood. It’s a green way of achieving dryer wood by using waste products from the business.

In their Social Impact report this year, Key Fund stated that every social enterprise they support had been turned down for finance at some point because they work in sectors that investors do not understand – putting impact on an equal level to profit. Conversely Key Fund do not use credit scores or blanket rules, preferring instead to get to know their client, assess risk and find a way to do a deal.

Treestation’s finance director Patrick Morrello appreciated the personal approach. “Key Fund talked to us from the beginning and showed enthusiasm for our project. Rather than having strict eligibility guidelines they were able to look at us individually, visit and see what we were doing. We value their continued support and involvement.”

Also useful to Treestation will be Key Fund’s impact reporting tool, KeyFIT. This year Key Fund made it available to all their customers. The tool not only helps ventures measure the impact on their stakeholders but also assess the wider benefits to the local economy, community and environment. Given their success, Key Fund will be investing in their own business this year by growing their team. 

The final word goes to their chairman Hugh Rolo: “We believe strongly that Key Fund has a vital role in developing community and social investment activity in the North and Midlands, continuing to innovate and develop new solutions to the challenges facing our communities”