Big Society Capital
Inclusion London Event
Alastair Ballantyne – June 2013
History of Big Society Capital
2009 Government
Consultation on
“Social Investment
Bank”
2007 Commission
on Unclaimed
Assets
2000 Social
Investment
Task Force
launched
2006 Government sets
up the Office of the
Third Sector
2008 Dormant
Accounts Act
2013 “Big
Society
Capital: One
Year On”
2012 Launch of
Big Society
Capital by Prime
Minister
BSC 2012 Highlights:
£56.6 million of investment commitments
20 investments detailed in annual report
Big Society Capital – Building the Social Investment Market
HSBC
Barclays
Lloyds TSB
RBS
Dormant
Accounts
£600m capital
Big
Society
Capital
Investors seeking to
positive social impact
and financial return.
Social
Investment
Finance
Intermediaries
Social enterprises
requiring growth capital.
Operating Principles
Independent
Transparent
Wholesale
Self-sufficient
Big Society Capital’s role
INVESTOR
CHAMPION
Grow the social investment
intermediary market
Increase awareness and
confidence in social sector and in
social investment
Provide range of affordable and
appropriate finance for frontline
social organisations
Work with sector to develop
framework for evidencing social
outcomes
Create investible products for
individual and institutional
investors
Work with UK and EU
governments to encourage
appropriate policy and tax
support for social investment
SIFI
Approach
E.g.
Big Society Capital Commitments - 4 broad types
General funds –
increase supply of
capital available
to social ventures
Specialised funds –
invest with themes
such as sectors or
regions
Social Impact Bonds –
provide upfront capital for
social ventures delivering
services under Payment by
Results contracts
Operating
intermediaries–
provide support to
social sector
organisations
Nesta Impact
Investment Fund
PURE Community
Energy Fund
Essex SIB
Social Stock Exchange
Invests in social
enterprises that
use technology and
innovation to solve
social issues.
Provides finance for
community renewable
energy projects.
Supports intervention
programmes for 11-16 year
olds at the edge of entering
care or custody so that they
can safely remain at home
with their families.
Connects socially
motivated investors with
social purpose
businesses that need
capital.
Nesta
PURE
Social Finance
Social Stock Exchange
What is an Intermediary?
Investor
Who are intermediaries?
•Sector Bank
•Specialist Fund
•Social Impact Bond
•Market infrastructure
Frontline
Investor
Investor
Intermediary
Frontline
Frontline
Investor
What does an intermediary do?
•Select investments
•Monitor social & financial results
•Diversify risk
•Raise capital for future investments
Frontline
Social Investment Finance Intermediaries
Social
Incubator
Fund
Investment Readiness
Social Funds
Social Enterprise funds
Specialised funds
Social Lenders
Social Impact Bonds
Bridges SIB
Fund
Social Investment
Market CIC
Big Society Capital – How We Invest
We analyse our investments based on three criteria:
Market development contribution
Strong
Weak
Strong
Social Impact Performance
Strong
Financial Performance
Big Society Capital – Evidencing Social Value
• Social Mission: what is the promise of change? – vision and
understanding of issues
• Governance: legal structure, mission locks, board, exit
• Activities: track record, management, financial/social impact
alignment
• Impact: depth and breadth of impact, innovation, frontline
delivery
• Impact Assessment and Measurement: assessment and
screening, planning and targeting, monitoring and reporting,
auditing
Social Organisations seeking Social Investment
Define Revenue Model
Developing a Business
Plan and Evidence Base
Funding
• Trading business
• Venture philanthropy
• Advice
• Willing commissioners
• Government grants
• Social Investment Funds
• Buying an asset
• Non-government grants
• Social Outcomes Funds
Forecast growth in Social Investment supply and demand
(£m)
- Unsecured lending
- Quasi equity
- Outcomes based financing
Source: The Boston Consulting Group
Are you thinking about Social Investment?
Social Sector Organisation
Social Finance Intermediary
Directory of Intermediaries
Online Expression of Interest
www.bigsocietycapital.com
www.bigsocietycapital.com