Message from our CEO

A message from Cliff Prior

Welcome to Big Society Capital’s Impact Report. Everything we do as the UK’s wholesale social investor is to improve people’s lives and achieve social impact. This report looks back at the impact which we and our partners have achieved since our inception, the successes and the challenges, and what we have learned for the future.

Big Society Capital was set up five years ago to help charities and social enterprises access the kind of repayable finance they need to become more sustainable and to grow their social impact.

Social investment has come a long way over those five years. We’ve seen a big growth in the number of investments made, and more confidence in making investment deals. We’ve seen a far wider range of investment models develop and many more funders to choose from. We can also now see a realistic path to sustainability for social investment.

But this isn’t enough. There has been considerable progress but much more to do. Here are some of the lessons we’ve learned after 63 investments into 36 fund managers and social banks (our intermediaries), reaching over 420 social organisations:

It’s tough. Developing social investment takes time and effort – just like any major new approach. Balancing affordability for charities and social enterprises, with the risk and returns that co-investors need, means achieving progress is challenging.  Social investment is not for everybody, but it is a crucial tool for many and can achieve substantial impact.

Innovation is even tougher. Venture funds, those that support early-stage innovative organisations with high-growth potential, face the greatest challenge because of the high risks and often longer paths. More blended finance and venture philanthropy is needed to make this a success in the UK: it’s a vital route to new ideas, new energy, and addressing new challenges in society.

Public sector markets are tougher still. Business-to-public sector models frequently grow much more slowly than business-to-consumer models. New approaches are needed to get innovation into public services, and we are starting to see these develop.

Social risk is very real. If a charity or social enterprises takes on investment and fails, the risk isn’t just financial. It could mean that vulnerable people suddenly lose the support they need. This has to be factored into decision making: for charities and social enterprises when taking on investment; for intermediaries when they make investments; and deciding when to intervene if an organisation faces difficulty. There have been some very courageous and capable leaders demonstrate how to avert harm to beneficiaries in difficult times.

Leadership is critical. It takes strong and resilient leadership to take a social venture to its full potential to help disadvantaged people. It’s that quality of leadership, that combination of enterprise savvy, inspiring others, and including the people it’s for, that makes it all work.

Impact management is challenging but essential. Improving people’s lives is the goal. However difficult it is to get useful impact information, it is a must have. We have put forward seven principles for good impact practice, drawn from the experience of our work to date. 

It’s a growing and powerful movement. Social investment is growing and achieving more. It is a global movement of people who want to their money, their talent and expertise, into its highest purpose: improving people’s lives.

Through what we have achieved, what we have learned, and from what you have told us, we can now identify the areas where social investment can have its greatest social impact. These are the areas where we will focus the next rounds of our investments into intermediaries, adding to the wide range of investment funds already available and continuing.

The UK property market is failing lots of people, with rising levels of homelessness and people living in unsuitable accommodation. We will use social investment to help provide a home for people most in need.

Some areas of the UK have been left behind, and even in better off areas there are pockets of disadvantage. We will use social investment to help communities in the most under-served places to rebuild and to improve lives.

Huge amounts of money are spent dealing with tough social issues which could have been prevented. We will use social investment to improve people’s lives by tackling problems at an early stage.

It all starts with the social issues. Social investment is a tool which organisations dedicated to solving those issues can use to boost their work and help people improve their lives. This report shows how it can work, how much more we still have to do, and what are the next steps. 

 

If you have any thoughts about our approach, or about our Impact Report, we would like to hear from you.