Lessons learned inspire future of social investment at JRF

Ten years ago, JRF made its first social investment, to test how purpose-led capital could be used as another tool in tackling poverty and injustice. What began as an experiment has since evolved into a strategic, mission-aligned portfolio, shaped by learning, partnership, and adaptability. Over the past decade, social investment has become a vital part of how JRF delivers on its purpose: not only funding innovative solutions but helping to reimagine the systems that perpetuate inequality.

A timeline of key milestones for JRF and the broader social investment field is featured later in this reflection. Details of our current portfolio can be found on our social investment page.

Origins and guiding principles

When JRF established its social investment programme in 2015, it joined a small but fast-evolving ecosystem of wealth holders and enterprises deploying capital for social purpose. At that time, the total value of UK social investments stood at £1.5 billion, modest in comparison to mainstream financial markets, but growing rapidly.

For JRF’s Trustees, dedicating 5% of investable assets to social investment served several aims:

• to pioneer new ways of achieving JRF’s charitable objectives by tackling poverty at its roots
• to recycle capital, extending the reach of funding over time
• to collaborate with other foundations and investors to amplify collective impact.

These aims have remained guiding principles for our social investment programme, anchoring decision making even as the strategy has evolved in response to external change and internal learning.

Building the portfolio: tackling poverty, fostering systems change

Since 2015, JRF has committed around £17 million, approximately 5% of its endowment, to social investments across 14 impact funds and 28 social enterprises. These investments support innovations that address the root causes of poverty and catalyse transformative change in housing, work, financial inclusion, and community wealth building.

Examples include Fair for You, which offers affordable credit to low-income households; the WISH Fund, supporting women fleeing domestic violence into stable and safe housing; and Ethex, enabling everyday investors to back community-led renewable energy and other impact investments building local economic resilience. Together, these investments illustrate JRF’s conviction that capital can be both purposeful and practical, improving lives while shifting systems.

Marking 10 years of social investment gives JRF an opportunity not only to celebrate progress but to reflect critically on what has worked, what has not, and how learning can shape the next decade. This reflection is set against a shifting context: inequality, poverty, and climate risk have all worsened in the UK, even as social investment and impact capital have grown tenfold. The case for deploying patient, concessional capital in service of social transformation is therefore stronger than ever.

Our central question now is: 

How can JRF’s social investment programme best contribute to realising our mission, supporting and speeding up the transition to a more equitable and just future, free from poverty, where people and planet can flourish?

To explore this, we are asking ourselves:

• How should our funding offer evolve to meet the needs of a transition economy?
• How can our approach disrupt the dominant paradigm of an economy in service to finance, and foster instead the paradigm of finance serving people and planet?
• Where can our investments be most catalytic in attracting other funders and supporting solutions to scale?
• Should we focus on a narrower range of impact themes to deepen influence?
• In what ways can social investment play a critical role in driving JRF’s transition toward a fully mission-aligned endowment?
• How can we better connect our investment, policy, and campaigning capabilities to drive systemic change?
• What new relationships and capabilities do we need to develop to realise our mission?
• Have we truly learned from the investments that fell short of expectations?

Key insights from our ways of working

A defining feature of our approach has been how we work, guided by passion for our mission, commitment to learning, and humility; 3 further behaviours have been especially influential in the social investment programme:

• balancing rigour with flexibility
• working in partnership
• drawing on JRF’s broader expertise and networks.

These have proven decisive in shaping both impact and financial outcomes across a decade of investment.

Balancing rigour with flexibility

Strong governance and operational discipline have given JRF the confidence to be flexible and exploratory. The social investment policy sets clear parameters, including a 2-3% annual financial return target, yet allows annual review and adaptation. This framework has enabled JRF to pursue new opportunities and adjust strategy as markets, needs and learnings evolve.

Casting a wide net, within clear boundaries

JRF began its social investment journey by investing widely to maximise learning. Over the first 2 years, we completed 8 investments across housing, work, care, and financial inclusion. A key lesson from these first, mainly debt-based, investments was that equity-type capital is better suited to supporting innovation. This insight led directly to the creation of Fair by Design in 2017, providing risk equity to ventures building solutions to the poverty premium. Our policies and processes also support the design of bespoke financing models for individual enterprises, such as a Sharia-compliant structure for refugee housing co-created with ACH and other funders in 2017 and a repayable grant provided to Pathway in 2023.

Managing risk through diversification

As JRF’s strategy matured, it blended higher-risk direct investments with lower-risk fund commitments. While the asset-backed nature of our investments into housing funds such as National Homelessness Property Fund 1 (NHPF 1) and Social and Sustainable Housing (SASH) significantly mitigates financial risk, it has not held back these funds’ contribution to structural change in the UK housing market. These fund models have enabled charities and other purpose-led organisations to acquire nearly 2,000 properties for housing vulnerable people, while building an investment track record that is now attracting pension funds and other mainstream investors.

These housing funds sit alongside more recent equity investments into BelleVie and Lightning Reach. Both are part of the growing segment of non-asset locked, purpose-led enterprises. Our investments demonstrate how JRF supports scalable, mission-locked enterprises that align with its broader social justice agenda.

Learning from failure

When Our Power went into administration with over £20 million of debt in 2019 it was a sobering reminder that innovation carries risk. Joint reflection with other investors highlighted the need for stronger due diligence and value of portfolio diversification - lessons now built into JRF’s investment practice.

Working in partnership to amplify impact

Partnership sits at the heart of JRF’s social investment identity. Nearly all our investments have been made alongside other funders, allowing us to share insight, reduce costs, and increase impact. Collaboration has been particularly powerful in the design and governance of investments, from co-creating Fair by Design with Better Society Capital to supporting the founders of Pathway in establishing their Fund Manager Incubator.

At times, JRF has taken a leading, catalytic role championing new ideas and de-risking early capital. In others, we have contributed as a committed co-investor, helping to fill funding gaps and signal confidence to the market. In every case, we aim to maximise our value-added contribution whether through funding, thought leadership, or convening.

Drawing on JRF’s wider expertise and networks

Increasingly, JRF’s distinctive value lies not just in its financial capital, but in its intellectual and relational capital. By connecting our investments to our research, policy and campaigning work, we help accelerate systemic change. For example, linking social investment in Living Wage-accredited enterprises to JRF’s broader work on low pay reinforces both agendas. Similarly, supporting equity and inclusion-driven fund managers complements JRF’s advocacy for racial justice and fairer financial markets.

What’s next for JRF’s social investment?

JRF’s first decade of social investment has shown the power of patient, purposeful capital. As we move into the next, we are committed to using what we’ve learned to help build stronger, fairer systems and to keep learning along the way. Our aim is not simply to fund innovative solutions, but to help transform the financial and social systems in which they operate, dismantling poverty and enabling people and planet to flourish

The context has shifted — inequality, poverty, and climate insecurity have all intensified — but so too has the recognition among wealth holders that their assets must serve a greater purpose. With the social investment market now 10 times larger than 2015, we are keen to help steer this momentum towards models that prioritise fairness, inclusion, and systemic change.

With the dual aims of maintaining our ability to influence a much larger social investment market, and of actively contributing to JRF’s ambition to manage all its wealth in line with its mission, we have expanded our team and upgraded processes and systems during the past year. Building on this stronger foundation and a decade of learning, the next few years will see our social investment programme:

• invest in innovative models that drive structural change toward a more equitable and just future
• test new investment structures and themes that could be scaled by our endowment and other mission-led investors
• pilot blended finance grants to expand impact and access
• sharpen our thematic focus on climate justice, wealth, funding and power, place and poverty, and housing
• maintain strong governance and operational rigour, alongside a responsive approach
• strengthen collaboration across investment, policy and advocacy
• deepen and expand partnership working, and continue to learn and evolve.

How you can collaborate with us

As our ambition grows, so does our recognition that lasting change can only be achieved through deep collaboration. We’ve strengthened our own capabilities and learned much over the past decade, but the scale of transformation we seek, an economy that enables people and planet to flourish, demands that we work alongside others who share this vision. We invite social enterprises, policymakers, wealth holders and other partners to join us in shaping this next chapter.

Social enterprises

Social enterprises pioneer models of business that spearhead a new economic reality. By testing and scaling business models that meet social and ecological needs, they demonstrate that more equitable and regenerative ways of operating are possible. These models can influence industries, shape local economies, and inspire policy reform, serving as practical proof that alternative systems can thrive.

To deepen their systemic impact, social enterprises can:

• identify key moments to influence wider change, whether in industry practice, public debate, or policy
• build partnerships that extend their reach and strengthen shared learning
• highlight and champion the most transformative aspects of their models, helping to legitimise new paradigms of ownership, value and purpose.

Policy makers

Social innovation can help build the evidence base for a fairer and more sustainable economy - demonstrating that models sharing greater voice, ownership and value with workers and communities are both viable and desirable. For instance, JRF's social investments into community owned housing, worker-empowered enterprises, and ventures tackling the poverty premium, showcase a more hopeful vision for our future business, finance and public sectors.

To unlock this potential, policy makers can:

• direct government procurement, investment and subsidy to back community-anchored and socially-driven business models
• embed best practices developed by social enterprises into regulation and policy frameworks
• champion a vision for an economy centred on the wellbeing of nature, communities and workers through industrial strategy, fiscal policy and local economic development.

Wealth holders

Wealth holders, whether foundations, family offices, pension funds or mission-driven institutions, have immense power to accelerate systemic change through how they deploy their capital. Past examples, such as the evolution of microfinance from a disruptive grassroots model challenging traditional financial structures to a globally recognised asset class, show what catalytic capital can achieve.

To help shape the next frontier of transformation, wealth holders can:

• adopt investment strategies explicitly designed for systems change, aligning portfolios with long-term social and ecological outcomes
• back pioneering funds and enterprises that shift power, ownership and value towards communities
• collaborate to build the infrastructure — data, networks, blended-finance mechanisms and governance models — needed for an equitable transition
• lead by example, using their influence to normalise purpose-led investing and challenge short-term financial norms.

If this vision resonates with you, we invite you to connect with us at socialinvestment@jrf.org.uk.

Together, we can create the conditions for a fairer, more sustainable economy, one that truly enables people and planet to flourish.