Social investment is a subject that has been much talked about in recent years. There are some within the voluntary and community sectors with strong views about social investment, either for or against. As someone who has spent almost a decade working in the realm of social investment, I am most definitely an advocate. But recently I have found myself becoming quite frustrated with the social investment sector because I am not sure we are adequately serving those who have social impact at the heart of their mission – charities and social enterprises.
It is no secret that the social sector is operating in challenging times. We are in our 6th year of government austerity and public contracts are feeling the force of that. Given this climate, is the social investment sector providing finance that these often small organisations can access and afford?
Recent research has highlighted the need for social investors to be able to offer not just finance which is lower cost, but also blended finance and finance which can take higher risks. Unfortunately despite this need, often this isn’t the sort of finance that is being offered (although there are a handful of honourable exceptions). What all of this points to is that what the social investment market is currently offering isn’t necessarily what the majority of the market we serve wants from us. We are not responding to demand, but instead we are asking others to fit our needs and those of our investors. And I’m not sure that’s the right way round to be doing things.
When I was interviewed to become a Clore Social Fellow in September 2014 I was asked what change I wanted to help bring about in society. My answer was that I wanted to help redistribute resources; that there is enough money in the world but that at the moment too much of it was accessed by too few, and that I wanted to change that. I still want to change that. And I want to change that because the charities and social enterprises we are here to serve are struggling. We need to:
- Look at new, different and innovative ways to get the money that already exists to a point where it can be used to help the organisations supporting the communities in need.
- Be able to demonstrate that the finance we are providing is creating a social impact and making a real difference to people’s lives.
- Ask investors to support us in offering the type of finance that charities and social enterprises want; simple, straightforward finance that they can afford.
Doing this will be no easy task, but it is something I believe we are duty bound to do. Because if we try we might just do it - and this will benefit everyone.
Download Deborah’s full Provocation Piece here.
Please share your views and comments about Deborah’s blog and full piece below, or you can contact her on Twitter.