Denise Holle, Head of Social Investment at Joseph Rowntree Foundation, talks about how social investors can encourage wider adoption of the real Living Wage amongst their investees.

At Joseph Rowntree Foundation, we are driven by the belief that poverty in the UK can be solved. This unifying theme in our insight, policy and campaigning work also runs through our social investment portfolio.  

In social investment, the escalating cost of living crisis led us to consider what more we can do to help alleviate the severity of immediate need. One action that stands out is promoting the real Living Wage among our investees and the wider social enterprise and impact investment sector. Research we’ve undertaken with our portfolio investees suggests several approaches investors can adopt fairly quickly to make a difference.

Recommendations for social investors: 

Embed Living Wage (LW) considerations in your investment decision making:

  • Always look at applicants’ accreditation status, and at the number of their staff being paid the real LW.
  • For non-LW payers always ask for reasons, and a calculation of what the cost to them would be if they started paying it.
  • Become a Living Wage Funder (LWF) to join a movement of funders, social impact investors and entrepreneurs championing the real Living Wage.

Support investees and applicants to become Living Wage accredited by:

  • Signposting to Living Wage Foundation resources and the tailored help available to all prospective applicants.
  • Providing concessionary funding or sponsoring advice and training.

Support enterprises using innovative delivery models that mitigate the trade-off between serving disadvantaged groups and paying staff the real Living Wage.

Our starting point

As an impact investor, we aspire to see all our social investee organisations become Living Wage accredited employers. However, reality is currently lagging well behind this aspiration. Only half of the social enterprises into which JRF has invested directly are LW accredited, and for the larger number in which we have indirect investments via impact funds, the accredited share is less than 30%.

The cost-of-living crisis, and September announcement of a 10% increase in the real Living Wage, focused our attention on this shortfall in accreditation, which potentially translates into inadequate support for the employees of our investees. Although we are confident that our investees are mission-led and achieving impact by providing needed services to people from disadvantaged groups, making a formal commitment to being real Living Wage employers is also an important element of impact.

As part of JRF’s response to the cost-of-living crisis, we would like to help more of our social investment portfolio to become Living Wage accredited. However, in order to provide this support, we felt that we first had to better understand their circumstances and the barriers to accreditation which they face.

Our research

Our first step was to survey 24 funds and social enterprises which have received funding from JRF’s social investment programme. The survey was designed with significant input from the Living Wage Foundation and JRF’s policy team. The survey was well received, and 20 of our investees (82%) responded. The survey results informed our recommendations for social investors outlined above and are detailed in this paper.

Urgent and wider action also needed

The backdrop of the cost-of-living crisis gives greater urgency to supporting the enterprises we fund directly and indirectly to move more of their staff onto the real Living Wage.  

However, we accept that achieving universal Living Wage accreditation is beyond the capabilities of foundations and impact investors acting alone. That aim requires systems change and solutions to structural barriers such as low public-sector contracting rates. Addressing such challenges is enormously complex, and the Living Wage Foundation is a focal point in catalysing and coordinating efforts from a range of stakeholders in the public, private and third sectors to improve compensation and conditions for people in low-paid jobs. 

Nonetheless, there are opportunities for foundations and impact investors to do more to contribute their valuable knowledge and perspective through collaboration with other stakeholders from the policy, commissioning and delivery spheres, and with service users.  

The Living Wage Funder network brings together funders, social impact investors and Commissioners interested in championing the Living Wage across the social impact sector. 

If you would like to explore further with JRF and the Living Wage Foundation how foundations and impact investors can better contribute to the wider Living Wage movement, please register your interest through an email to We are planning to convene an initial discussion for investors early in 2023.