Twenty years ago a radical new concept began to percolate through Ireland’s community and voluntary sector, one that has challenged conventional thinking ever since. Like all great ideas it was deceptively simple, and worked by pressing finance into service as an agent of social justice and social transformation.
In the two decades since social finance has made the transition from theory to practice and, in the process, enhanced the lives of thousands of people and communities across Ireland.
Sr Magdalen Fogarty and the Presentation Order were the first to grasp the potential of social finance in Ireland. With their support, Clann Credo – community loan finance – was established in 1996. Since then other religious congregations have joined Clann Credo as social investors.
Following a 2007 government initiative, the Social Finance Foundation was established, funded by the retail banks. Clann Credo is now the leading provider of social finance in Ireland.
On Thursday, President Michael D Higgins will deliver the keynote address at our 20th-anniversary conference. Given his long-standing commitment to community development and social inclusion, the President's presence as we mark two decades of growth is fitting.
Beyond profit
Social finance demands far more from investments than a simple profit. It requires investments that deliver a genuine social and community benefit, along with a financial return. In other words, it requires both a financial and a social dividend.
In short, social finance has the potential to fundamentally reshape the standard model of economic development and the wider role of finance.
Over the past two decades Clann Credo has invested more than €82 million in some 800 local initiatives, covering all aspects of community life all over the country,
With 20 years of experience at the coalface, its regionally-based staff offer invaluable experience for any community group with ambition for progress and development. Community volunteers can tap into a network of similar groups nationwide and avail of critical advice and support.
Such groups often experience severe difficulty seeking finance from conventional sources, and are frequently faced with demands for personal guarantees. In contrast, Clann Credo does not require personal guarantees on its low-interest loans.
The organisation has also pioneered innovative new concepts, such as social impact investment, where preventative social services are financed by private investors, with financial return conditional on successful, measurable social outcomes.
Addressing deficits
Social finance plays a critical role in our community development, addressing major deficits in existing services or social infrastructure. It helps local leaders grow and develop projects across a range of sectors – local facilities, transport, recycling, tourism, catering, caring, the arts and in the wider green economy.
Clann Credo has supported projects that deliver key services (childcare, elder care) or that fill obvious gaps in social infrastructure, such as community halls, sports centres and other centres of local life.
A key focus of its work is in supporting and nurturing community and voluntary activity. In every one of these often marginalised communities we find local heroes whose only goal is to improve the lives of those around them.
Community and voluntary groups, sports clubs and charities face many challenges, but Clann Credo ensures that accessing community loan finance is not one of them. It can now provide community loan finance to any community development group in the country.
Later this week will see the national launch of its Community Impact Loan Scheme, a specialist €50 million fund targeted at assisting the creation of local jobs, services and facilities. Clann Credo is building from the ground up, step by patient step. Paul O’Sullivan is chief executive of Clann Credo