Shining Armour or Sheep’s Clothing? (Recommendations for Scotland)
A mapping of the social investment landscape. This should include active or potential investees, the intermediary and investor space, the fit between current products and market needs, and the scale of finance required. It should include a review of business, financial, and other support around investment readiness, as well as ‘investor readiness’ needs for those from investment backgrounds wishing to engage with the potential investee environment in Scotland.
A debate on the cultural fit of social investment. This would clarify areas of reticence and whether these are a matter of principle (whether investing rather than giving is always a problem) or something more subtle (for example, where the investment comes from or who gets the financial return). It could be informed by:
• a clear statement of the potential tension between focussing on social impact and focussing on organisational form.
• a review of whether angel investing, crowdfunding and peer-to-peer lending approaches might address some ethical concerns and provide a more culturally palatable community/human element to social
• a discussion of the role of for-profit social business and where the right line is to draw a boundary if social impact is the overriding issue.
More clarity from government about its vision for social investment. Various national organisations, not least Big Lottery Scotland, could play stronger roles in facilitating this.
More funding to grow success and encourage risk taking. Support should be provided for replication and social franchising as alternatives to the obsession with finding innovation from scratch. This need not be in the form of social investment but could also stem from restructuring grantgiving in the context of a look at the overall funding context.
Clearer guidance for charity trustees. This needs to cover both taking on and giving out social investment, including reference to legal duties and liabilities.
More partnerships between grantmaking organisations and social investors. This would include more strategic use of grants to leverage additional financing and create more security for high potential investees. The Funders Forum is an obvious context for this.
Greater engagement with large private sector organisations. This could explore the potential for social investment alongside or as an alternative to some grantmaking and corporate social responsibility activities, potentially drawing in business skills alongside this to support social enterprises.
See full summary here.