Today Big Society Capital publishes its first comprehensive estimate of the size and shape of social investment in the UK
Five things stand out:
- The value of social investment at the end of 2015 was around £1,500m.
- This value is spread across nearly 3,500 individual investments. We are pretty confident that social investment is therefore being used by at least 3,000 charities and social enterprises (because only a few will have several deals on the go at the same time)
- There is a pretty diverse mix of social investment products now. Quite a few of them are ‘higher-risk’ products e.g. non-bank lending which tends to be via unsecured loans (10% of social investment by value), social property funds (9%), community shares (6%), charity bonds (6%), and equity-like products (2%)
- Over two-thirds (70%) of social investment is channelled to charities and social enterprises with some sort of asset lock. This is also the part of social investment emphasised by Big Society Capital’s current strategy.
- Social investment activity seems to be growing. The 2015 calendar year saw around £427m committed; up from only £165m in 2011. A lot of the growth in deal-flow has come via higher risk products.
What does all this mean? At one level - not much – the most important thing is to know what positive social impact is being achieved. It will definitely be some time before we can summarise this easily for social investment as a whole, although we have made a start for our own investments in our first impact report, which we’ll repeat later this year.
But this study does at least suggest that social investment is already a relevant tool for a few thousand charities and social enterprises, and that social investment products are becoming more diverse and more able to bear risk. And that social investment is growing, if not spectacularly, then at least steadily. So we take some encouragement from this study, as well as using it to inform our own future strategy and activities.
We would love to get feedback on this report and further ideas on what social investment data is useful. Please contact us on firstname.lastname@example.org.
Read the full report.