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Social investment: an overview

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Chapter 1

What is social investment?

1 min read

Social investment is the use of repayable finance to help an organisation achieve a social purpose. Social investment is repayable, usually with interest. The UK is widely recognised as one of the most advanced social investment markets in the world. In 2016 the Government published its strategy on supporting the social investment sector in the UK, committing to use social investment as a way to transform public services. Social investors can be individuals, institutional investors, dedicated social investment funds and philanthropic foundations, who invest through their endowment. 

For social impact bond projects, commissioners will most often work with social investment fund managers that bring together social investors into funds that frequently have a defined policy focus or other characteristics that define a focus to the investment interest. Investors in SIBs are typically motivated by the prospect of achieving blended, social and financial returns. 

More information about social investment in the UK can be found on the Good Finance website.

By financing innovative approaches, social investment also has the potential to help deliver public services more efficiently and, in some cases, tackle the underlying causes of growing demand for services instead of just trying to cope with their consequences.
HM Government, Social investment: a force for social change, 2016

Chapter 2

Sources of information and advice

1 min read

Good Finance

Good Finance is a digital platform that helps charity organisations and social enterprises to navigate the complex world of social investment. The website includes a wide range of resources on the types of funding available, who are the investors, and how to measure social impact.

Big Society Capital

Big Society Capital is an independent financial institution with a social mission, set up to help grow social investment in the UK. It does so by working with partners to build understanding of social investment among charities and social enterprises, and also with potential investors.

Big Society Capital have produced a comprehensive estimate of the size and composition of social investment in the UK, available for download here.

Directory of SIB investment funds

Big Lottery Fund has engaged directly with a wide range of financial institutions, grant foundations and investment funds that have worked with outcomes based projects needing start-up investment. A significant proportion of these have invested in SIBs.

A core group of these have provided the Big Lottery Fund with information, summarising their involvement in up-front investment in outcomes based projects, particularly SIBs. Each entry included in this directory has been submitted by the organisation in question. Big Lottery Fund has also provided a list of websites and contact details of other potential investors and sources of finance for your reference as part of this directory. Inclusion in this directory does not represent an endorsement by the Big Lottery Fund or the GO Lab. The directory can be accessed here.

Directory of SIB advisors

This directory was developed by the Big Lottery Fund and provides summary details for a range of organisations that have engaged in providing technical support and related advice to applicants to the Commissioning Better Outcomes Fund and that have indicated an interest in supporting applicants to the Life Chances Fund and other SIB related funds.

Information for each entry has been provided by the organisation in question. Inclusion in this directory does not represent an endorsement by the Big Lottery Fund or the GO Lab. The directory can be accessed here.