By Azlina Bulmer, Charity Bank
30.04.2014
Social investment is undoubtedly a growing market. Boston Consulting Group reported that £165m was invested in 2010-11 but a recent report by GHK in July 2013 has shown that in 2011-12, investment in the social market has increased to £220m.
On the supply side, we have seen a surge in the availability of capital and products in the social investment market. CDFIs and other investors are willing and ready to invest in investable organisations, however, the growth in the market has somewhat been curtailed by the weaknesses in the demand side for investment. Most Social Sector Organisations (SSOs) are not investment ready and in most cases are unwilling to seek alternative funding to the traditional methods such as grants and legacies. Those who are willing often do not understand what investors are looking for or how to “sell” themselves and their organisation to potential investors.
Clearly, the demand-side deficiencies compromise the effectiveness of supply-side interventions. With this in mind, the UK government and many major grant funders see the need for investment readiness programmes which seek to increase the pool of investible SSOs.
The last few years have seen investment readiness programmes being rolled out including Mutuals Programme and Investment & Contract Readiness Fund. These programmes have been successful in their own right but as per individual programme design, they only address specific segmentation of the social investment market.
The concerns for many investors and SSOs remain to be the lack of support for the majority who operate at the lower level of the investment market, the smaller organisations that simply do not know where to go, what to do and how to do it. The social investment market is complicated for many SSOs.
With this in mind, the launch of Big Potential programme earlier this year is rather timely. The new £10m Big Lottery Fund funded programme will offer SSOs the chance to consider the usefulness of social investment as part of broader financing or fundraising strategies. In July, SSOs will have access to a website with useful learning and development content and in-depth information on social investment including simple case studies, guides and a fully automated diagnostic tool intended to be a helpful companion to any SSO starting its social investment journey. Events will be held across England in the next few years not just to promote Big Potential as a programme, but also promote Big Potential as concept; a place where all SSOs are welcome no matter how big or small they may be, where they can learn and understand more about social investment and what it may (or may not) do for individual organisations.
Only time will tell if the various support programmes will make a difference to SSOs and the social investment market, but to do nothing in addressing the weaknesses in the demand-side is simply not an option.
Azlina Bulmer is the Programmes and Development Manager at The Charity Bank Ltd. Charity Bank Ltd is also a delivery partner for the Big Potential Programme together with The Social Investment Business, Locality and SEUK.
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