How ​‘stripped-back’ social investment helped support survivors of modern slavery

Securing a social investment loan can help fund capital projects, support transition to a new business model or plug a funding gap; covering activities that may be excluded from grant funding while avoiding the high interest rates demanded by commercial lenders.

City Bridge Foundation is well known for its grant funding, but we’re also an active social investor. We hear from Mafusi, a victim of modern slavery, the Helen Bamber Foundation which supported her but also needed new offices, and the pioneering law firm committed to making the investment process as simple and as equitable as possible.

She touched down in the cold and damp of a London autumn in search of a new life of freedom and opportunity, but it turned into a living nightmare.

Fleeing abuse in her native Lesotho, Mafusi arrived in the UK, ominously, on Hallowe’en 2000, a few weeks shy of her 20th birthday, having landed a job as an au-pair, but it wasn’t long before the stark reality of her position became clear.

“I had to get up at 6am to get the kids ready for school, then come back and do the housework, cleaning and ironing,” she says. ​“Sometimes they made me clean the homes of their friends or family. I didn’t finish working until everyone else was in bed.

“They told me I wouldn’t be paid and would just be working for my food and boarding. My accommodation was so poor – if you made a dog live in those conditions, the RSPCA would be knocking at the door.”

After enduring more than a decade as one of a growing number of people in the UK identified as victims of modern slavery, the darkest moment came when, during a mental health crisis, Mafusi found herself in A&E, her young daughter taken into temporary care. That’s when a lifeline was thrown to her by the Helen Bamber Foundation.

With over 17,000 potential victims of modern slavery identified in the UK in 2023 – the true figure is likely to run into six figures – it’s little wonder the foundation, which supports survivors of trafficking and torture through therapy, legal support, housing and welfare advice, needed to move to bigger headquarters.

“We were on the ground floor of a building in Camden, with no natural light and with metal bars on all the windows,” says CEO Kerry Smith. ​“We had outgrown it, didn’t have space for our community groups and it wasn’t a very pleasant space for our clients.”

Having secured the leasehold on new, bigger premises in Hackney, the charity had secured around 60 per cent of the money needed to refurbish the building, but needed a bridging loan to enable it to carry on its vital day-to-day work while continuing to fund-raise for the remainder of the renovation costs.

Lacking a guarantor, and put off by the prohibitive rates offered by commercial lenders, the charity turned to City Bridge Foundation – London’s biggest independent charity funder – which, in addition to its better known grant funding, has a £22 million social investment fund.

“Grant funding is hugely competitive and getting more so,” says Tim Wilson, the foundation’s social investment fund manager. ​“It means getting underway with a project can be delayed and costs can increase due to inflation. Often that’s time and money organisations just can’t afford.

“Unlike with grant applications, where you have to put everything in the application to be assessed, with a social investment loan you can just pick up the phone and have a chat with us. We don’t expect people to have a perfect proposal from the start.

“We were able to get the money to Helen Bamber Foundation very quickly from the point they approached us. It saved them having to go around lots of different funders and gave them the certainty and the confidence to go ahead with the move.”

The £240,000 loan agreement was one of the first to be drawn up based on the principles of the Equalising Deal Terms – a simplified, stripped down approach focused, as the name suggests, on a more equitable relationship between loanee and lender.

It was pioneered by Sung-Hyui Park from City law firm Bates Wells, in conjunction with the Equality Impact Investing Project and a project reference group made up of key social investors and investees, which helped formulate the principles.

“Even with a social investment loan, the agreement can be 30 or 40 pages long and there’s lots of arcane stuff in there,” she says. ​“For all their good intentions, the process is often quite one-sided in favour of the lender, which can cause a power imbalance and inadvertently undermine the impact that’s trying to be achieved.

“I had a chat with Tim about which protections he needed keeping in and which he didn’t, and we drafted a loan agreement that was much shorter and simpler. When we presented it to Helen Bamber Foundation’s lawyers, they were surprised by how fair the agreement was to them. It was probably the fastest loan negotiation we’ve ever done!”

The agreement was based on a relationship of trust, stripping out clauses which were unnecessary in this case, such as those requiring the loanee to secure permission from the lender before disposing or acquiring of key assets, restructuring the business or making key personnel changes.

“The whole process was really simple and clear for us and provided critical support at a vital time,” says Kerry. ​“It was vital that we got the agreement in place by June so we could start the building work in July – and by September we had moved in.

“The clients really love it. The rooms are bigger and they feel a lot more at home. We’ve got many more therapy and consultation rooms, and we’ve been able to bring our community groups back in-house.”

Moving to a more spacious, more welcoming and more accessible base will enable the charity to support 50 per cent more clients, helping even more people like Mafusi to break free from the shackles of modern slavery and build a new life for themselves.

Now a proud mother of three, living in Kent and running her own catering business, she also serves as a board adviser at the charity which supported her in her darkest moments, using her own experience to advise the organisation on its life-changing work.

“When I visit the new headquarters, I almost wish I could be a client again,” she says. ​“Just walking through the door makes me feel like I’m in a place where help is available and where they’ve got my back. The feeling of togetherness and space for the community is amazing.

“Without the Helen Bamber Foundation, I wouldn’t be speaking to you now. The biggest thing they did for me was restoring my trust in humanity, which I had lost completely – that’s priceless.”