He wanted to be a soldier, like his older brother. Having passed all the tests, physical and otherwise, it was an X-ray that diverted Sam Tarff from starting a career in the Army.
The image showed damage done to his hip by a childhood disease, and despite being fighting fit (he is still fan of intense fitness training), the recruiters would not take the risk that he might cost them expensive health care funding in the long-run.
Today, his job is all about risk – but the kind of risk that’s well worth running because it almost always comes good. He leads Key Fund, a social investment ‘bank’, which funds organisations that make a real difference to some of the country’s most deprived areas.
Having grown up as the youngest of eight on a council estate in the former pit village of Shafton, Barnsley, with his widowed mother making ends meet on a primary school teacher’s salary, theirs was not the poorest family – but deprivation was all around.
He went on to build a track record in community development work with disadvantaged areas and expertise in the funding of community social projects, later becoming skilled in turning around organisations on the verge of liquidation.
Tarff turned around the fortunes of the City Challenge-spawned Priory Campus one-stop community resource centre in Barnsley, which need to sustain itself after the area base grant funding stopped
“I learned that social enterprises need to accept that those who can pay for their services should pay something, so that the services can be offered for free to those who really can’t pay.”
He was later drafted in as “lifeboat support” to a community organisation in Stocksbridge called the STEP Development Trust near Sheffield, which had historically offered advice and employment training and other services to those who’d been knocked hard by the closure of the local British Steel plant.
That organisation, STEP Development Trust, had lost £2m and was projected to lose another £500,000 – but with drastic changes and the support of a team of dedicated volunteer staff and board it was reduced to £200,000. After Tarff agreed to stay on as CEO, the Trust was brought back to generating a small surplus.
“It was hard work, and still is (he’s now a trustee) but part of the process was to help the organisation to become more sustainable by cutting its dependence on grants.”
After 10 years as a board member, last year he became CEO of the Sheffield-based Key Fund –which was set up in 1999 to help revitalise communities ravaged by the collapse of the coal and steel.
The original focus of the Fund was on the provision of small social capital grants of under £10,000 to support economic development, using European and government funds targeting areas of greatest deprivation.
Since its birth the Fund has evolved and grown into the country’s most prolific investor in social enterprises. It supports, through loans or a blend of loans and small development grants (which come mostly from the European Regional Development Fund), businesses with social impact which mainstream funders have rejected and are seen as too risky to touch.
“We invest in those who have a good idea to help a community but can’t get money from elsewhere because the area they operate in is perceived by banks and other providers as populated by people without much disposable income,” says Mr Tarff.
“Therefore they think their loans won’t be repaid because such businesses will fail.”
Well, as it happens, the default rate among those Key Fund invests in was only 4.16 per cent last year – a rate vastly below the double figures experienced by commercial lenders.
As a condition of its own funding as a social enterprise, Key Fund must charge a flat rate of 6.5 per cent interest on its loans – so that it is not seen to be distorting the financial market.
The smallest funding package the Fund provides is £3,500 and the largest so far has been £300,000. The average is £25,000.
“Advice, monitoring, hand-holding, problem-solving are there for the people we work, with all the way through,” he says.
“With a start-up we will also help them to hone their business plan, so that they get up and running with our help, repay our loan and are then fit for further investment from elsewhere.”
From its small beginnings, Key Fund has grown exponentially, and it now operates from Watford to the Scottish Borders.
It has managed contracts valued at £74.5m since its inception, and has invested £33m so far to hundreds of businesses which stimulate local economies by providing goods and services, jobs, training and work experience.
It has funded businesses as disparate as a home care franchise for the elderly, a book recycling scheme which sells some books commercially in order to give books away for free to children from poorer homes, community-run pubs, a renewable energy creation scheme and an organisation which employs disabled people make circuit boards for industry.
The last government embraced social investment enthusiastically, and current figures show there are three times more social enterprise start-ups happening than traditional small and medium enterprises.
In 2014-15 the total social enterprise market was valued at £175m, and this looks set to grow to around £220m in the current year. A million people currently work in the social economy.
Key Fund, which handled 40 per cent of the 370 social investments across the UK last year, is expected to invest £11m this fiscal year.
By any yardstick social investment is a booming sector of the UK economy, and this country leads the field. But there are always new challenges, says Mr Tarff.
He says “Funding innovation is important” and the Fund supports two tech (IT) incubator projects with small funding packages to help new ideas to reach the point where they will attract other investment.
“I’m very proud of what the team at Key Fund does. There are organisations out there providing services to the community who say that they’d have gone to the wall without us.”
For more information on the Key Fund visit: www.thekeyfund.co.uk
Sam Tarff Factfile
Date of birth – 12.6.66
First Job – Sports Coach – Wakefield City Council
Favourite Holiday – Hawaii
Favourite Song – Easy by the Commodores
Favourite film – Forest Gump
Favourite book Ultimate Weapon by Chris Ryan
Best Advice given – Trust your instincts
Most Proud of – Daughter graduating in Law