Making social investment more social

Making social investment more social
Social Spider CIC
October 2014


The Alternative Commission on Social Investment is an initiative set-up to investigate what’s wrong with the UK social investment market and to make practical suggestions for how the market can be made more accessible and relevant to a wider range of charities, social enterprises and citizens working to bring about positive social change.


The Commission will look at how we can move beyond replicating expensive mainstream approaches to finance for the social sector and develop approaches that are more social, putting people before structures and institutions and prioritising social change.


Social Spider CIC has been awarded a grant by the Esmee Fairbairn Foundation to carry out the project. The commission team will be led by David Floyd with independent advice and support from Dan Gregory and Nikki Wilson, guided by a group of Commissioners, all of whom will have some interest and knowledge of social investment but many of whom offer experiences and perspectives beyond those of the current major stakeholders in the social investment market.


Our take on the current situation is that:


* While many charities and social enterprises that: (a) want repayable finance at all and (b) can’t get it already from mainstream providers, want relatively small unsecured loans or equity-like products, the majority of the social investment market is still made up of large investments secured against buildings.


* Most social investment intermediaries have been designed to invest in relatively large, high-growth social organisations. While many funds have been set up, intermediaries are struggling to find social sector organisations to invest in.


* Many social investment intermediaries are perceived to be attempting to replicate expensive, complicated mainstream approaches to finance within the social economy rather than using simple mainstream constructs or developing approaches that are new (including models making use of digital technology)  or distinctively social – for example, based on involving wider pools of socially motivated investors.


The Alternative Commission will explore five key questions:


1. What do social sector organisations want?
2. Can social investment, as currently conceived, meet that need?
3. What’s social about social investment?
4. Who are social investors and what do they want?
5. What can we do to make social investment better?


The Commission will launch in October 2014 and publish its report in February 2015.


See website