Three years after the 2008 financial crash, BGF was created to answer a specific need – the lack of support for SMEs looking for long-term investment and sustainable growth. Since then, it has invested in 570 businesses, deployed £4bn of capital and completed more than 200 exits. “There is a sense that BGF has found its feet and we have established ourselves with a positive business model and positive exits,” says Andy Gregory, who was made CEO of BGF in 2022 and has over 30 years’ experience in private equity, acquisition finance and corporate finance. “That gave us the confidence to think about doing something more tangible.” 

This is where the BGF Foundation comes in. In line with the organisation’s approach to investment, the BGF Foundation backs small and mid-size charities that support young people and are looking to scale. Established in 2022, it has committed more than £850,000 to UK charities. Rather than purely donating cash for one-off projects, the Foundation provides support on a multiyear basis, both financially and non-financially.

“At BGF, we support businesses across the regions, using internal resources that we scale externally through our network,” says Gregory. “That might mean helping with people, technology, marketing, geographic expansion or cyber security. We felt we could use those same resources and skill sets to help charities, which share many of the same challenges in how they build and grow sustainably.” 

Match up

While there are many charities deserving of support, the key for the BGF Foundation is finding those that align with BGF’s philosophy and that can most benefit from the support offered. 

“We are not only interested in whether the work is impactful, effective and helping young people – we are also looking at whether the organisation is at that stage of its lifecycle where the financial and non-financial support and advice BGF could provide would have a catalytic effect,” says Matt Little, who joined the BGF Foundation in January 2024 as interim COO; previous roles include the Energy Saving Trust and Vision Catalyst Fund.

The focus is on charities looking to scale but that have passed the £1m annual income mark, rendering them ineligible for other types of funding. So far, the Foundation has established long-term partnerships with three charities across the UK, the most recent being Social Enterprise Academy.

There is a symbiotic relationship between BGF and the Foundation that runs through from the initial selection of the charities to the support given. BGF staff across the regions raise awareness of local charities that might be worth further investigation. A central Foundation team of two acts as an intermediary to conduct further assessment, drawing on in-house and external expertise. 

“If we are putting in meaningful donations or grants we want to make sure they are going to well-run, robust charities that are sustainable and will ideally grow,” says Gregory. “We will look at their governance and their financials. We have a large network of execs and non-execs who we might involve. It is proper due diligence certainly, but an apportioned output of that gives us the insight to be able to help and support those charities in the same way we do with those businesses we want to back.”

It is an area that Little considers as increasingly important. The Foundation’s aim is to increase the number of partnerships to around 10 and to “really drill down into what is our USP. There are so many fantastic charities in the UK. Where can we help the most? Based on the three we currently support, we have a good idea, but we can still get better at identifying where we add the most value and how we unlock that in the best way.”

More than money

Once a charity is on board, interaction will vary depending on need, but may be as frequent as weekly. All staff are allocated two social impact days to support the charities, but may also fit in calls or shorter interactions around day-to-day work. Part of the reason for limiting the number of charities supported is to maintain a close relationship and be more hands on than a traditional grantmaker.

In addition to the financial and operational skills and support that employees can bring – from cyber security to the integration of customer relationship management systems – the Foundation is keen to involve BGF’s portfolio. 

“We are unusual in our scale in that we have more than 350 companies in our portfolio spread across many different regions,” says Gregory. “There are often benefits in charities getting to know those portfolio companies and seeing how they can help each other.” 

One example of how these connections can be facilitated is with an upcoming environmental, social and governance day that will be attended by many portfolio companies. Also attending will be Neil McLean, the CEO of Social Enterprise Academy, who will have the opportunity to significantly expand his network among potential supporters and partners. 

Little believes such partnerships create a virtuous circle. Not only does the business benefit from the positive impact on staff wellbeing and learning and development, “people enjoy these very direct interactions with charities”, he says. “As part of the wider Foundation work, we can report back on what the charity is doing, to see how their contribution has added up to the impact the charity is providing. We don’t have trouble finding volunteers. When done efficiently and well, there is a triple win aspect.”