Social investment

ThinkForward_2

Social investment is an exciting potential route to scale for charities and social enterprises.

As more investors are showing interest in social investment bonds (SIBs), it follows that charities and social enterprises want to be responsive. The real challenge, in our view, is for the charities to focus everything they do on meaningful and sustainable outcomes – that is, where the young people they work with are either learning or earning.

At Impetus-PEF, we believe the social investment market will make a real difference only when funders and commissioners demand such outcomes and when charities and social enterprises are delivering those very outcomes.

Working with both commissioners and charities

Impetus-PEF has been a significant investor in two of first SIBs that focus on disadvantaged young people – Teens and Toddlers, and ThinkForward – and as such, we are at cutting edge of results-based social investment. We are especially well positioned to be an effective intermediary for social investment in the young people sector, because:

  • Our sector expertise means that we can identify and support both charities and potential commissioners to develop payment-by-results models to finance and scale innovative, successful interventions.
  • Our strong links with both the corporate world and other philanthropic foundations enable us to link charities with funders interested in social investment models. We were the first recipient of investment worth £1 million from Big Society Capital, part of which was used to secure a social impact bond worth £3 million from the DWP to deliver ThinkForward.
  • We have extensive experience and expertise in building charities’ capabilities. Supporting charities to define their product and market, increase their cost effectiveness and – critically – prove their impact with measurable outcomes has always been core to our approach. These are the same capabilities that are proving crucial to successful social investment.
  • We can draw on a vast network of business partners to provide pro bono, high quality and timely support to set up and manage social investment vehicles.

Working with policy makers

There is a still a lot of work to be done to successfully build the social investment market in order to improve the quality and scale of services addressing social need. A mature market will require all stakeholders to come together and build up their skills – commissioners, investors, intermediaries and delivery organisations. Intermediaries such as Impetus-PEF can use their agency to develop and bring together commissioners, investors and delivery organisations in order to improve the quality and scale of services addressing social need.

By way of example, we sat on the UK National Advisory Board of the G8 Social Impact Investment Taskforce, whose role is to advise on the experience, learnings and evolution of the UK social investment market. We previously chaired this Board’s working group on capacity-building – which examined the issue of readiness of social sector organisations for social investment.

Driving impact

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