Embargoed: 00:01 Monday 15th September 2014
Social Investment Experts Set Out Next Steps
for Development of UK Market
A group of leading experts in social investment from the UK have today set out their vision for the
next stages of development of the social impact investment market in the UK. The report 'Building
a social impact investment market: The UK experience' is part of the culmination of a year's work,
following the launch of the Social Impact Investment Taskforce under the UK's presidency of the
G8 in 2013.
Social impact investments are those that intentionally target specific societal and/or environmental
objectives along with a financial return and measure the achievement of both. Although still
relatively small, the social impact investment market in the UK is widely regarded as one of the
most advanced globally.
The report is based on the work of the UK National Advisory Board, which held working group
sessions, commissioned three separate working groups on priority issues and also commissioned
an independent review.
As well as setting out a summary of key developments for other countries to learn from, the report
calls for key initiatives in six areas to develop the market further:
1. Improve the capacity of social organisations to appropriately use investment to scale
their impact, specifically through the creation of a social impact and scaling fund and the
expansion of the Investment and Contract Readiness Fund
2. Promote a new culture of Government procurement that encourages innovation and
prevention, specifically through launching a Government hub for prevention and innovation
and creating a social prevention and innovation pilots fund
3. Make it easier for businesses delivering social value to be recognised by launching a
Social Economy Commission and establishing a Social Performance Certifier and golden
shareholder model form
4. Provide a combination of grants and investment to intermediaries, by establishing a
blended capital facility
5. Require all pension funds to offer a social investment pension option
6. Encourage greater transparency around lending into deprived communities,
particularly from large financial service institutions
Nick O'Donohoe, Chief Executive of Big Society Capital and Chair of the UK Advisory Board
to the Social Investment Taskforce, said:
“The establishment of the Social Investment Taskforce last year under the UK's presidency of the
G8 provided an exciting opportunity to draw on global expertise to do even more to connect
socially motivated investors with charities and social enterprises tackling tough social problems.
The recommendations published today set out a compelling vision to take this forward, and we
hope that other countries will be able to learn from the UK's experience to-date.
However, in the UK there is much more that needs to be done to ensure that charities and social
enterprises can access appropriate investment, and to enable more socially-minded investors to
enter the market. We are committed to working with partners from across the social and finance
sectors, as well as government, to help make a thriving and sustainable social investment market
in the UK a reality.”
Daniela Barone Soares, Chief Executive of Impetus-PEF and Chair of the working group on
Building the Capacity for Impact, said:
"Our paper highlights that there are two types of capacity-building required by the social sector –
one is around building strong resilient organisations, with good governance, systems, controls and
management. The other is around building organisations which can reliably and predictably
produce meaningful social outcomes, eventually for large numbers of people. Both are crucial for
the social investment market to flourish, but the latter has been largely neglected in attempts to
develop the market. We recommend much more investment in, and support for, organisations to
build these 'outcome-producing' capabilities - for the good of investors, investees, and for those
who need 'outcomes' most of all, those in our most deprived communities."
Toby Eccles, Development Director of Social Finance and Chair of the working group on
Recommendations on Procurement, said:
“If you were to design a model to keep innovation out of government, present procurement
practices would be hard to beat. Major change is required if we are to move away from a one size
fits all approach to services that fit the needs of the people using them rather than the needs of the
system.
Drawing on lessons learnt by the IT industry and elsewhere, we recommend a completely different
approach to government procurement which would have a profound impact and enable more
prevention and more innovation in social services.”
James Perry, Chief Executive of Panaphur and Chair of the working group on The Social
Business Frontier, said:
“The legal and regulatory environment for business and charity in the UK was established in an
analogue age where profit and social good were conceived as separate. Certain sectors of business and charity have now moved into the digital age. Entrepreneurs, investors, charities and governments are collaborating and aligning to create profits with purpose – delivering measurable social value alongside financial value. New structures, such as Benefit Corporations, Social Impact
Bonds and Community Interest Companies, are being conceived and adopted around the world,
and offering the promise of a step-change in the ability of charities and businesses to create social
value . The time has come for a strategic response in the legal and regulatory environment so as to
support, rather than inhibit, these developments”.
Notes to editors
For further details and interview enquiries please contact:
David Dinnage, Big Society Capital
ddinnage@bigsocietycapital.com / 020 7186 2510 / 0788 587 9500
Members of the UK Advisory Board are available for interview. In addition, case studies of charities
and social enterprises using social investment are available (some examples are listed below).
Early copies of Building a social impact investment market: The UK experience are available on
request.
About the UK Advisory Board to the Social Investment Taskforce established under the
UK's presidency of the G8
The UK Advisory Board was established in June 2013, as part of the Social Investment Taskforce,
led by Sir Ronald Cohen, and established under the UK's presidency of the G8. Alongside the
publication of the Social Investment Taskforce report, the UK Advisory Board today publishes its
final report and three working group papers.
The following reports are published today:
•
Building a social impact investment market: The UK experience
•
Building the Capacity for Impact
•
Recommendations on Procurement
•
The Social Business Frontier
All reports will be available from 10am on Monday 15th September 2014 at:
http://www.bigsocietycapital.com/social-investment-research-library
Members of the UK Advisory Board
Nick O'Donohoe, Big Society Capital (Chair)
Bernard Horn, Social Finance
Cliff Prior, UnLtd
Daniela Barone Soares, Impetus-PEF
David Gregson, CRI
David Hutchison, Social Finance
David Royce, CRI
Dawn Austwick, Big Lottery Fund
Deidre Davies, Deutsche Bank
Geoff Mulgan, Nesta
Harvey McGrath, Big Society Capital
James Perry, Panahpur
James Vaccaro, Triodos
Jim Clifford, Bates, Wells, Braithwaite
Johannes Huth, Impetus-PEF
John Kingston, Association of Charitable Foundations
Jonathan Jenkins, Social Investment Business
Mark Boleat, City of London Corporation
Michele Giddens, Bridges Ventures
Nat Sloane, Big Lottery Fund
Peter Holbrook, SEUK
Peter Wanless, NSPCC
Philip Colligan, Nesta
Philip Newborough, Bridges Ventures
Rob Owen, St. Giles Trust
Sir Anthony Greener, St. Giles Trust
Toby Eccles, Social Finance
William Shawcross, Charity Commission
Examples of social investment
Providing sustainability to a community centre
Greenway Centre, Bristol
The Greenway Centre is in one of the most deprived area of Bristol. It provides training
courses for job seekers, fitness classes which help referrals from local GPs and Hornfield
prison, facilities for local groups and a business centre for local start-ups. The Centre took
a loan for £55k from Pure Leapfrog Community Energy Fund (which received a £1m
investment from Big Society Capital) which enabled the centre to install 207 solar panels.
The panels generate income for the Centre from the national feed-in tariff, and reduce their
overheads.
Reducing youth unemployment
Energise Social Impact Bond, Thames Valley
Adviza is a charity that runs the Energise project. It works with 14 and 15 year olds who
have been identified as being at high risk of dropping out of school and becoming
unemployed. The project is financed through a Social Impact Bond, a partnership between
Adviza, Social Finance, Big Society Capital and the Department of Work and Pensions. If
the project is successful in meeting its targets, the Department of Works and Pensions
repays investors through savings to the public purse.
Supporting vulnerable older people
Developing Empowering Resources in Communities (DERiC), Leeds
The Garforth Neighbourhood Elders is a community organisation in Leeds. DERiC has
invested £150,000 in the Garforth thanks to a £1 million loan from Big Society Capital. The
money will be used to develop a scheme that will support isolated and vulnerable older
people through community volunteering and better use of care budgets. The project
reduces reliance on statutory services so that money can be reinvested by communities,
and used to repay the loan.