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City Philanthropy

A Wealth of Opportunity

SITR proves powerful fundraising agent for prison bakery business

Sep 28th 2015
Duane Jackson

On the surface Duane Jackson’s success story could sound pretty run of the mill; creating a software company, growing the business into a sector leader and eventually selling it off for a healthy profit, then ploughing some of the proceeds into charities and social enterprises. But that’s before you hear about his early life.

“I grew up in children’s homes in the East End of London. After leaving school I got involved with low-level drug trafficking. It escalated quickly and by my late teens I was trafficking drugs internationally. I was caught carrying ecstasy into the United States, arrested and spent time in prison on both sides of the Atlantic,” explains Jackson.

Jackson left school with no qualifications but had taught himself how to code on a ZX Spectrum. Following his release from prison he used this coding knowledge along with support from the Prince’s Trust to create an accounting software package KashFlow.

After building it up and selling it to a London corporate, Jackson returned the favour to The Prince’s Trust with a £100,000 donation. However, what he really wanted to do was address the failures of the prison system.

“I found out quickly in prison that the opportunities to better yourself and learn useful (and legal!) skills are rather limited. Basic numeracy and literacy are well covered, but anything beyond that is difficult to access.

“I spoke with Ken Clarke, when he was head of the Ministry of Justice and tried to help the prison service and charities deliver entrepreneurship training and support to prisoners coming to the end of their sentence – but it felt like banging my head against a brick wall and I gave up in frustration,” said Jackson.

It was in 2015 that a friend introduced Jackson to Freedom Bakery – a start-up social enterprise giving employment training to prisoners in HMP Low Moss on the outskirts of Glasgow.

“Freedom Bakery felt like something that was very much on the front line and could have a real impact on prospects for offenders. It gives inmates the experience of working in a real commercial kitchen and gives them skills they can use when they are released. It even goes further to help them find employment upon their release.

“Too many people fall into the vicious cycle of imprisonment and re-offending. Showing them they are capable of something is a huge confidence boost and can break that cycle.”

Jackson’s decision to invest in Freedom Bakery was made easier by the government’s Social Investment Tax Relief (SITR) scheme, an income and capital gains tax relief for investors in social enterprises that was launched earlier this year. Freedom Bakery is the first start-up to use SITR to attract funding.

“SITR made the investment considerably more attractive than it would have otherwise been. The relief essentially means that the money invested goes a lot further. I see it as an extra £3,000 from the government for every £10,000 that I invest.” said Jackson.

SITR not only made Freedom Bakery a more attractive proposition to Jackson but also made it possible in the first place - as Matt Fountain, Founder of Freedom Bakery explained: “The problem with the third sector is that pots for start-ups can be very small. You would be doing well to raise £25k in year one from grants – and those would not be allowed for capital costs or contribution towards salaries. This leads to a dependency on grant funding.

“SITR allowed us to raise more money, quicker. In five weeks we found six investors and raised £40,000 – which gave us enough to establish ourselves within the prison.

“The added benefit was that by using investors, instead of subsidies from the Scottish Government, we were in a better position to negotiate our contract with the Scottish Prison Service and avoid bureaucratic hurdles which could have constrained us,” said Fountain.

“I was drawn to the concept of Freedom Bakery because it’s an initiative for a purpose that is close to my heart. Whilst it may not give me the financial returns I can get with other investments its focus is on long-term social impact – and I think that is something that should be considered in any investor’s portfolio,” said Jackson.

To find out more about the project visit Freedom Bakery.

Visit UK Startups to find out more about Duane Jackson.

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