Fredericks Foundation has provided loans to financially excluded individuals for over 20 years and has helped almost 2000 business start-ups. Over the last year at Fredericks we have been reviewing how we can further extend our impact and in conclusion have shifted our investment focus to social enterprises.
Through our experience in the provision of loan finance to smaller organisations, particularly during the pandemic, we felt there was a need to offer a more flexible form of investment – and so we now offer Revenue Share funding. This enables both the investor and investee to share the risk and reward of enterprise and is a form of ‘patient’capital – if the enterprise performs badly, the repayments reduce. Revenue share funding gives the investor the right to a percentage share in the revenue of the enterprise. The amount repayable is usually capped and/or limited to a fixed period.
birdsong, a fellow member of SEUK, was Fredericks first social enterprise investment. birdsong create original wardrobe staples that are ethical, sustainable and made by women paid a fare wage.
Wearing their clothing is a protest in itself – against the fast nature of the fashion industry, the obsessive pursuit of trends and the systematic abuse of women in the production line. It is estimated that 60 million women worldwide – aged 18-35 and working in the garment industry – make less than a minimum wage. These women are making the clothes seen on the high street every day and are hidden in the fashion supply chain.
“We are an ethical and sustainable fashion brand, but first and foremost we’re a social enterprise. This means that even through tough times like this global crisis, our number one priority is the wellbeing of our makers.” Sophie Slater, Co founder birdsong
Ethical working: birdsong dream up designs in-house, and then work with expert makers who face barriers to employment in the UK – from artists and printmakers to seamstresses and painters – and pay them the London living wage to bring their creations to life.
Sustainable by design: They source high quality, sustainable materials so that products are at the highest possible quality and promote a long-life wardrobe for their customers. Every garment is made to order to minimise waste.
Local impact: birdsong work with communities in London. Their supply chain is made up of grassroots organisations, charities and fellow social enterprises.
“I am proud to be one of the Birdsong makers (providing embroidery services). I have never felt that I am displaced as a migrant, feeling lost or I can’t fit in, but working with them has always made me feel at home, comfortable, accepted, safe, and understood. They support migrants and create job opportunities. I admire their commitment and vision of enabling women from different background (my students and myself) to become independent, with no limitations such as who we are or where we come from.” Mona, Bow Sewing Centre
Fredericks invested £35,000 in birdsong in 2021 through a Revenue Share Agreement to help fund their growth. We provide ongoing support and guidance to our investees through a Board observer and access to our network, including a pool of experienced mentors and fellow entrepreneurs. All Fredericks profits are reinvested to achieve our charitable aims and 75% of our staff are unpaid volunteers.
“We are very pleased to welcome Birdsong into the Fredericks family. They fulfil all the criteria we look for in a social enterprise. They have a positive impact on creating new jobs, paying living wages to people facing barriers to work; they help create a better society through a socially impactful supply chain; and they positively affect the environment through reducing waste and use of sustainable fabrics. We look forward to supporting them to grow their business.” Paul Barry Walsh, Fredericks Founder.
“We were introduced to Fredericks Foundation through our funders at UnLtd, and we suggested a Revenue Share agreement as we felt it was a much fairer, and more modern way of doing finance for our business. The folks at Fredericks have been incredibly kind, considerate, and helpful along the way, and it’s great to have funders that share our values and hold us accountable to do the good work we set out to.” Sophie Slater, Co founder birdsong