Patient catalytic capital: turning dormant assets into lasting social change for public benefit

Launching a new series of blogs, Oversight Trust Chair, Vaughan Lindsay, explores how patient capital can be used for public benefit.

Dormant asset funding is, arguably, one of the social sector’s best-kept secrets. I’ve worked with many types of funding – commercial investment, charitable grants, philanthropy, statutory funding, earned income and impact investment – and dormant assets are different. Dormant Asset funding is patient, enabling greater innovation and risk taking than other forms of funding when addressing system issues. It has a broad remit that is largely free from government or financial institutional influence and represents material amounts over multiple years for the social sector.   

The money comes from bank accounts, insurance policies and investments that have lain untouched for years. Rather than sitting idle, financial institutions can choose to put it to work for public benefit, while the original owners keep the right to reclaim it. Since inception of the Dormant Asset Scheme in 2011, a cumulative £1.6bn of dormant asset funding has been unlocked for good causes across the UK.  This money is then allocated across the UK’s four nations via the National Lottery Community Fund, and the four operating companies overseen by the Oversight Trust have received most of the English-portion of these funds.  

Once our operating companies (Access – the Foundation for Social Investment, Better Society Capital, Fair4All Finance and Youth Futures Foundation) receive an allocation it isn’t tied to a narrow list of activities. Apart from Better Society Capital, which invests for both social and financial return, they don’t have to generate a financial return. They can decide how best to pursue their missions, provided they can show it relates to their purpose and is  making an impact. This mix of flexibility, scale and freedom from short-term financial pressure is what makes dormant asset funding unusual and particularly well positioned to address some of our most challenging social issues like NEETs, financial inclusion or societal market failures.

This matters because patient capital can take risks that other funding can’t. It can make room for uncertainty, test new ideas and build evidence that encourages grants, philanthropy or investment to follow. When I worked in Impact Investing  some philanthropic funding provided a similar role, in helping to test new approaches and models , like mobile telehealth services in West Africa,  that larger forms of funding could then support..

We shouldn’t overstate the case. It’s hard to prove that the later funding wouldn’t have arrived anyway. But the principle is clear: funding that can wait longer for results can support experiments, reduce risk and make it easier for others to get involved. Its value lies not only in the money invested at the start, but in the lessons learned, the confidence built and the extra resources it attracts.

This is where the Oversight Trust comes in. We don’t decide how the government allocates dormant assets, and we don’t direct individual investments. Our oversight role begins once the money reaches the organisations we oversee. On behalf of the public, we check that each one stays true to its purpose, is well run and delivers meaningful impact. We also ask whether it delivers value for money  and whether its work is additional – making things happen that wouldn’t otherwise – rather than replacing statutory funding that should come from elsewhere. We do this through structured reviews, deep dives, regular monitoring and garnering views from external stakeholders to provide third party perspectives.

This matters because the long view is under constant pressure. Political and media cycles tend to reward quick, visible results and simple numbers. Changing a whole system rarely works that way. Youth unemployment, financial exclusion and other social inequalities persist because they are complex, connected and unlikely to be solved by any single intervention. If we judge impact only by how quickly money is spent or how many people are reached in a single year, patient capital loses the very thing that makes it useful. Part of our job is to protect each organisation’s mission from being bent around the next report or political cycle.

That means looking at impact more broadly: how well an organisation understands the problem, tests and improves its approach, builds evidence, shares what works and draws in other funding. But patience must never become an excuse for a lack of urgency. . A long-term approach still needs a clear purpose, strong governance and careful scrutiny – and we expect to see progress along the way, not just at the end.

For the public, the case is simple. Money that would otherwise sit idle in forgotten accounts can, used responsibly, create real social value where markets don’t work well and conventional funding isn’t enough. In ten years, I’d expect to see significant measurable progress on some of these deep-rooted problems, and far wider recognition of dormant assets as a distinct and valuable form of funding or asset class. Used well, and overseen well, dormant assets can help close the gap between what markets provide and what the public needs, but the government doesn’t fund -and help change the systems that created that gap.