Social Impact Investment - Turn Your Money Into Real Change
“The world is on the brink of a revolution in how we solve society’s toughest problems. The force driving this revolution is “impact investing”, which harnesses entrepreneurship, innovation, capital and markets to power social progress. This report, Impact Investing: The Invisible Heart of Markets, explores this revolution and provides a set of summary recommendations that can be implemented across G7 countries to encourage the development of measureable social and environmental impacts alongside financial returns.
The crash of 2008 highlighted the need for a renewed effort to ensure that finance helps build a healthy society rather than endanger it. This requires a paradigm shift in capital market thinking, from two-dimensions to three. By bringing a third dimension, impact, to the traditional capital market priorities of risk and return, impact investing has the potential to transform our ability to build a better society for all.”
Social investment is repayable finance that creates both social and financial returns. It is provided to charities, social enterprises and socially motivated businesses. Investors expect to get their money back (often with interest) and expect the finance to have created identifiable social impact. Social investment is not a grant or a donation. It is money provided to enable an organisation to generate more income or be more effective: money to grow its business, put in place better systems, do more social good, and it repays the investment in the process.
Organisations might need social investment for a variety of reasons as they grow. These include start-up finance, maintenance and asset purchase, and scale-up finance.
The organisation taking on social investment should be clear about the social impact it expects to achieve and how it will set about evaluating its success. This is a distinguishing feature of social investment compared to mainstream investment. The returns are expected to be both financial and social.
Is social investment right for our organisation?
We have supported GoodFinance.org.uk, a new information service for charities and social enterprises considering taking on social investment. Please visit the site to find case studies, guides and other materials to help you explore your options.