A paper outlining four key characteristics of a robust social investment market.
It is increasingly recognised that lack of access to capital is acting as a barrier to charities achieving their social mission.
There is limited quantitative research on the capital need of charities, but ample case studies of charities struggling to manage working capital, deal with the unexpected and invest in innovation, growth and development.
This paper paints in broad brushstrokes a picture of the current situation and outlines the characteristics of a ‘robust’ social investment market. By robust market, we mean a world in which informed charities have access to appropriate capital, from a resilient capital supply, distributed using a variety of financial mechanisms.
We believe there are four critical pillars to a robust social investment market:
1) confident and informed demand from the voluntary and community sector (VCS)
2) efficient matching of supply and demand
3) variety of investment mechanisms
4) resilient supply of finance
Each of these are explored in turn in this paper, in each case, laying out the following elements:
- where we are now
- characteristics that would be evident in a robust market
- key barriers to progress towards that robust market
- some emerging ideas and solutions