When building capacity means driving impact
How do we build a social investment market and deliver its aims to increase the impact on solving social problems?
This week marks the publication of the report of the UK National Advisory Board to the G8 Social Impact Investing Taskforce. In preparation for this report, I chaired a working group to answer the question: what are the capacities needed by the social sector to deliver the aims of the social investment market? Around the table of our working group were senior figures from the social investment world – including those from Social Finance, BIG, Unltd, Bridges Ventures and Social Investment Business – whose contributions were based on both their own experience and wider market knowledge.
We found that, to fully develop the social investment market, there are two types of capacity-building required by the social sector. One is around building strong resilient organisations, with good governance, systems, controls and management. The other is around building organisations which can reliably and predictably produce meaningful social outcomes, eventually for large numbers of people.
Both are crucial for the social investment market to flourish – but the latter has been largely neglected in attempts to develop the market, and by the wider funding opportunities for the social sector. That’s why we recommended in our paper, Building the Capacity for Impact, much more investment in, and support for, organisations to build these ‘outcome-producing’ capabilities. This, in our view, will not just benefit investors – it will benefit the people who need outcomes most of all: those who live in our most deprived communities.