With pressure on the cost of living forcing households to tighten their belts, charitable giving is one of the first expenditures to be cut.
Attempting to encourage individuals, businesses and government to be more philanthropic runs counter to the prevailing economic realities, meaning that charitable organisations need to work even harder to generate income.
Innovative thinking is essential to ensuring that charities can continue their vital work. By looking at how programmes can solve practical issues for communities, employers and government agencies, charities can create incentives for people, businesses and organisations to get involved.
One such initiative is the Centrepoint Independent Living Programme.
A new approach
Centrepoint is the leading UK charity working to tackle issues around youth homelessness. It provides housing, support and outreach work for young people aged between 16 and 25. A key aspect of this work is to support young people in escaping a cycle of poverty and homelessness as they attempt to build independent adult lives.
The Independent Living Programme is an innovative and ambitious means by which to achieve this goal and its potential is huge.
Headed by Javad Marandi, its objective is to build 300 rent-capped homes for disadvantaged young people. Rent for these properties will be capped at a third of their salary.
The scheme is aimed at young people who have previously been homeless, or are at heightened risk of becoming so, and aims to be a stepping-stone between Centrepoint and the world beyond.
Throughout the scheme, young people will be supported in their search for jobs. They will gain access to skills training, further education, career advice and job applications.
Each young person will then be matched with a potential employer who has signed up for the Centrepoint Work Scheme. Once a young person is in employment they are then able to apply for a home.
Rent for accommodation through the Independent Living Scheme is capped at one-third of the young person’s salary.
This would typically mean that a young person in London who earns £18,000 per year would not pay more than £500 per month. This compares favourably to market rents which, according to HomeLet, is £1,832 on average for new tenants.
Benefits for employers
As well as being highly beneficial for the young people involved, it also has considerable benefits for employers.
With recruitment issues across huge sectors of the economy, the Independent Living Programme gives employers access to highly motivated young people. They have security in where they live and because their rent is capped, they can afford to take work that may not be as well-paid initially but can offer them the potential to progress.
As a model, this is a win-win situation, and one that Marandi hopes and believes can be expanded upon:
“I am confident that when we can show concrete evidence of how this scheme works, both practically and economically, we will be looking at building 30,000 homes across the country, helping people whatever their stage of life.”
The scheme is beginning with 300 homes in London and Manchester, but Marandi has set a target of 30,000 across the country. He believes that a nationwide scheme will not only make economic sense but will also have a considerable impact on wider society.
The businessman has a track record of delivery when it comes to social and philanthropic ventures, as well as a background as a highly successful entrepreneur and investor.
In 2017, he founded The Marandi Foundation, with his wife Narmina, which is dedicated to providing disadvantaged young people and communities in the UK with access to training and educational opportunities, as well as mental health and well-being support services.
A partnership for the future
To achieve this vision, the programme needs investors and would-be employers to get involved. Each home built by the scheme costs up £70,000 but if more companies support the programme, then this price decreases and the scheme becomes more economically vital.
Marandi expects the investment case to become even more compelling as the scheme gathers momentum and is rolled out in more locations. Because Centrepoint is highly experienced at managing properties and tenants, the scheme is already producing yields in line with current commercial rates.
The greater support the scheme receives in terms of expertise, land, property and income, the cheaper the build costs become and the greater the yield. Centrepoint expects yields to reach two to three times the current rates, making it very attractive to investors across the board, including pension and investment funds.
A road map for the future
Innovative, commercially attractive schemes such as Centrepoint’s Independent Living Programme provide a potential roadmap for charities and social enterprises to negotiate challenging economic times.
By bringing together the best of the voluntary sector with the commercial sector and finding areas of common interest, challenging social problems can begin to be addressed.