Paul O’Sullivan, CEO of Clann Credo – a social finance concept which was first introduced to Ireland over a decade ago by Sr Magdalen Fogarty, PBVM.

The announcement last year by the Minister for Finance, Brian Cowen, of the Government’s intention to spearhead a Social Finance Initiative was a major recognition of this new and exciting source of development funding for the community and voluntary sector. The Government approved the Social Finance Foundation in July 2006 with initial seed capital funding of €25m from the banking sector through its representative body, the Irish Banking Federation (IBF).

The establishment of the Foundation was in response to proposals made in a number of reports commissioned by Clann Credo, the Social Investment Fund, over recent years. It provides the opportunity to explore options for the future development of the provision of social finance in Ireland.

The social finance concept was first introduced here over a decade ago when Sr Magdalen Fogarty and her congregation – the Presentation Sisters – saw the potential to use investment funding to obtain a social as well as financial dividend. Today over 20 other religious congregations have made capital available to Clann Credo so that finance can be put to work in a way that promotes social justice.

Social finance seeks to meet the needs of those that mainstream providers regard as high-risk or non-economic or who cannot provide the type of collateral required by conventional lending institutions. While the sector is well established in the USA, where it receives state and federal funding, Minister Cowen’s announcement represented formal recognition of the value of social finance in the Irish economy and society.

Clann Credo through the Tulsk Action Group provided the means to set up a community laundry providing work for women over 40. It was so commercially successful that a dry-cleaning service was later added.

Clann Credo is the longest established and leading provider of social finance to community-based projects in Ireland, with offices in Dublin, Cork and Foxford, Co Mayo. It is a not-for-profit organization with charitable status. It provides finance to community and voluntary organisations and charities, mainly through loan finance and sometimes through direct investment. Social finance loans are granted on a different basis from mainstream lending institutions. All projects are evaluated on their potential to make a social as well as a financial return. It is a pre-condition of Clann Credo’s lending that a clear social or community benefit arises from projects it supports.

To date, more than €17m has been invested by Clann Credo in over 140 groups in Ireland. Support has also been provided to community-based organisations in Kosovo, Slovakia and South Africa. Partnerships have been developed by Clann Credo to support community development projects. In 2007 a mentoring and business-training service was launched in conjunction with WESTBIC – the Business and Innovation Centre in the Border, Midland and Western region. It emphasises direct liaison with start-up community and voluntary projects in the vital first 12-month period.

In 2006 a novel partnership between Clann Credo – the Social Investment Fund, Roscommon Partnership Company and Roscommon Credit Unions was developed to work with community groups to identify community needs, develop them as a social enterprise and bring them to fruition. Under this arrangement, organisations work through a business proposal with a dedicated mentor provided by the partnership and have access to information on all types of funding and business management. Loan finance can be made available through Clann Credo or the local credit union.

Residents at Tulsk’s 10-bed rest-care centre that allows people be cared for in their own community and which was set up with funding from Clann Credo.

Clann Credo is committed to managing its funds to mobilise investment capital and maximise its effectiveness as an agent of positive social change. Each project is offered tailored financial assistance rather than ‘off-the-shelf’ solutions. One of the longest established relationships between Clann Credo and community development can be found in Tulsk, Co Roscommon.

During the early 1990s high unemployment forced the emigration of local young people and resulted in an increasing sense of isolation and hopelessness for those left behind. Unsecured loans were generally not available as the banks required personal security from those applying for community development projects.

Today, because of the spirit and vision of a group of people in Tulsk, with financial backing from Clann Credo and grants from other state agencies, this small town offers a lifestyle that is attracting young families back to the area. Some 170 new houses are under construction and Tulsk is seen as a good place to rear families. A group of eight people, including local priest Fr Austin McKeown, set up the Tulsk Action Group and drew up an action plan for the area, starting with meals-on-wheels and a home-help service.

They approached Clann Credo for investment funding and, under the banner of Tulsk Voluntary Housing and Parish Services, some 10 new houses were built for six elderly couples and four families. Since the mid ’90s more than 25 jobs have been created in a townland of 1,700 people providing a range of services, including:
• A community laundry that provides work for women over 40, unavailable in the area previously. It proved so commercially successful that a dry-cleaning service was added.
• A 10-bed, rest-care centre that allows people be cared for in their own community.
• Pre-school facilities, for which new premises are now being finalised.
• A modern squash court in place of an old handball alley.

Clann Credo has provided the Tulsk Action Group with a total of three loans without personal guarantees. The development of the visitor centre was probably the most ambitious initiative of all. Tulsk is home to Europe’s largest, best preserved but until recently little-known Celtic royal site at Rathcroghan, home to the near-legendary Queen Maeve.

The proposed visitor centre received a 75 percent grant from Bord Fáilte but required a further £100,000, which could not be raised from conventional lending institutions. Clann Credo identified that the project could bring direct employment and significant tourist development and approved a loan for the remaining 25 percent. The ‘Cruachan Aí’ centre, which also includes a bookshop and coffee shop, is now fully operational and attracts many thousands of visitors annually.



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