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Sustainable Investment in Ireland (1995 – 2009)
It’s all too easy to forget that behind every enterprising community there is a story about the visionaries who are determined to revitalize their community.
The following reflects on that determination and the achievements of Ulster Community Investment Trust (UCIT). It celebrates the work of the visionaries who created Ireland’s first social investment fund, and looks forward to working with new investors who want much more from their investment.
From the outset, UCIT was established to be much more than a provider of financial investment to the third sector or as it is often referred to, the non-profit or social economy sector. We have always emphasized the importance of generating a clear social return as well as a financial return when investing in social economy enterprises, which often work in communities where unemployment is two or three times the national average.
Since2001, we have invested in excess of £23 million and supported 169 social economy enterprises. Our support has impacted on local job creation, tourism, community engagement and economic development in almost every city, town and village in Northern Ireland and the border counties of Ireland. UCIT has grown steadily since becoming operational in 2001 and currently has in excess of £15 million in capital under management and a strong reputation with Government, local councils, banks and our partners working within the third sector.
I believe that UCIT is well placed to lead the change that will be necessary to help the third sector in Ireland as it enters a new stage of expansion and growth. In the past, UCIT has steadfastly built up its reputation as a highly professional organisation, an innovator and driver of change in the third sector. Looking to the future, the Company will require a sustained programme of capitalisation to meet the rate of growth in demand for social investment at a time when the mainstream banks are less able to meet the demands of the sector.
I want to pay tribute to the members of the Board, past and present, whose guidance and inspiration has been invaluable to the Company’s success. I would also like to acknowledge that none of our work would be possible without the help and support of our main core funders, Department of Enterprise, Trade and Investment (DETI), Department of Agriculture and Rural Development (DARD), Department for Social Development (DSD), Invest Northern Ireland, the International Fund for Ireland (IFI) and the Social Finance Foundation (SFF).
I believe that an exciting future lies ahead for the third sector and that UCIT will play a central part in accelerating the growth of the sector into a major force for economic and social change.
UCIT has already proven itself to be a market leader in social investment in Ireland. Our ambition now is to improve access to capital for the third sector, and do this by securing the support of investors who want to make a positive difference to the lives of people living in the most marginalised communities in Ireland.
Ulster Community Investment Trust (UCIT) was established in 1995 as the first social investment fund in Ireland.
The concept of a social investment fund that would help stimulate economic growth and job opportunities in areas of deprivation and high unemployment owes much to the determination and vision of people like Father Myles Kavanagh. By the early 1990s, his pioneering work with The Flax Trust had already helped to transform the charity into one of the largest employers in the Ardoyne and Shankill interface area of North Belfast and cemented its reputation with the international community as an agent for social change in Northern Ireland. It was hardly surprising then that this prolific social entrepreneur, driven by the belief that enterprise and job creation could help end poverty and community division, was to be so influential in the establishment of a new concept in social investment in Ireland.
In the early 1990s, Father Myles was a key figure in the formation of UCIT’s predecessor, the Ulster Community Conference, an association of over 250 social economy enterprises that came together to provide an effective voice for the third sector in Ireland. The Conference wasted no time in appointing prominent local businesswoman and public relations expert, Marnie O’Neill OBE as Executive Director to press home the need for a social investment fund that would attract public and private investment into the sector. The concept received strong support from the United States Congress, including Senators Ted Kennedy and Patrick Leahy, as well as former US Vice President, Al Gore, and the President’s Special Advisor, Jim Lyons.
A development period ensued during which the Conference looked to the United States and in particular to the Community Development Finance sector (CDFI), which was enjoying considerable success in transforming the prosperity of those most marginalised in American society. The inspirational story of the ShoreBank Corporation, founded in Chicago under the leadership of Ron Grzywinski in 1973, showed how the vision of a group of influential people from the world of banking and finance could bring about real change to people’s lives and particularly to those living in poverty. Ron and other key figures from America, including the current US Ambassador to Ireland, Dan Rooney, gave their support and advice to the establishment of Ireland’s first social investment fund, Ulster Community Investment Trust (UCIT).
UCIT was incorporated in 1995 as an Industrial and Provident Society. A so-called “not-for-profit” commercial structure, where profits earned are re-invested in pursuit of the organisation’s mission, rather than to provide a financial return to individual shareholders. The new Company appointed a voluntary Board of Directors under the initial Chairmanship of Sir George Quigley, then Chairman of Ulster Bank in Belfast, with key people from the social economy sector in Northern Ireland sitting on the Board, including:
- Eamon McElroy – First Trust Bank
- Paddy Doherty – Inner City Trust
- Father Myles Kavanagh C.P. – Flax Trust
- Peter McLachlan – Bryson House
- Erskine Holmes – Northern Ireland Federation of Housing Associations
- Bob Downes – Scottish Enterprise
- Jeffe Jeffers, Flax Trust
- Patsy McShane – Workspace Draperstown Ltd.
- Barney Filor and Bill Bradley – Farset Enterprise Park Ltd.
- Malachy Mahon – Irvinestown Trustee Enterprise Company
- Professor Ken O’Neill – ORTUS
- Conor Patterson – Newry & Mourne Enterprise Ltd.
- Ann McLaughlin – North Antrim Network
- William White – Brownlow Ltd.
- Denis Smyth and Brian Adgey – Belfast Development Agency
- The Rt. Rev. S G Poyntz – Church of Ireland
- John McGregor – Business in the Community
- Michael Townsley – MTF Accountants
- John McKinney – Omagh District Council
In 1997, the Board of UCIT secured support from Flax Trust America to fund a market assessment and business plan for the Company, which was carried out by Belden Daniels, President of Economic Innovation International Inc. Boston, in partnership with Colin Stutt Consulting, Belfast. The business plan enabled UCIT to make a case to the Northern Ireland Civil Service to secure start-up funding. The Trust also made approaches to the International Fund for Ireland (IFI) and other investors in a bid to access additional capital.
Despite the Stutt/Daniels business plan identifying an initial capitalisation of £50 million for UCIT to meet the anticipated market demand for social investment, the Government agreed a package of £8.7 million and the transfer of an existing Government/IFI loan book, previously lent to social economy enterprises in Northern Ireland, valued at £6.6 million, which was written down to a value of approximately £3.1 million to acknowledge the bad debt element of the loan book.
UCIT entered into its operational phase in 1999 and approved its first loan in December 2000 under the Chairmanship of Eamon McElroy, then Chief Executive of Allied Irish Bank (AIB) and Chairman of LEDU, the small business agency for Northern Ireland. The Company appointed Ken Cleland, a senior executive from the First Trust Bank, as UCIT’s first Chief Executive, and established an International Advisory Council with key people from the world of commerce and banking.
Since the draw down of UCIT’s first loan in 2001, the Company has continued to grow under the guidance and chairmanship of successive chairs, including John McDaid (2001 – 2003), Erskine Holmes (2003 – 2006) and Helen Matthews (2006 – 2009). The Company has grown steadily over the last eight years and currently has in excess of £15 million in capital under management and a strong reputation with Government as a key social investor in Northern Ireland and the Republic Ireland. Under the current chairmanship of Seamus O’Prey, UCIT is well placed to support the third sector and realize the vision of the Company’s founders when they created UCIT to make a positive difference to the lives of people living in the most marginalised communities in Ireland.