Embedding an evidence-based approach in the social investment sector
Big Society Capital is an independent financial institution, set up to grow the social investment market in the UK. Big Society Capital invests in banks and other lenders, who in turn invest in social enterprises and charities.
Team:
Genevieve Laurier
Between 2012 and 2014 Big Society Capital provided over £150m in social investment for charities and social enterprises to help improve their impact on society. We worked with the lenders responsible for making these investments to help them strike the right balance between social impact and financial risks and returns.
Big Society Capital was launched in 2012 with over £100m to invest. At the time, social investment was a relatively new concept and there were challenges to distributing this investment effectively. Among other things, there was little agreement about how to assess the likelihood of social impact or measure the social return. Social investment was in part intended to make finance more accessible to charities and social enterprises. It was important that the added due diligence and impact measurement that went with it weren’t so onerous or expensive as to outweigh the benefits.
We worked with lenders including Big Issue Invest, ClearlySo, Key Fund, Leapfrog Finance, North East Social Investment Fund, Numbers for Good, Social Investment Scotland and Unity Trust Bank to help them refine their impact goals and translate that into their investment policies, processes and strategies. TSIP also helped to scrutinise the impact risk for individual deals and worked directly with social enterprises and charities who had received their investment to evaluate the impact of their work.
Each organisation was provided with new policies, procedures and tools for impact management and we also provided evidence and recommendations for particular deals. In addition, we held a roundtable to share learnings and some of the resources we developed with other investors and with Big Society Capital.