Better Society Capital’s Post

We know that the thought of taking on social investment can be daunting for charities and social enterprises but our team of specialists are passionate about helping not-for-profit organisations undertand its value and make successful applications. Do get in touch if it's something you are thinking about. Read our SWIM case study here: https://lnkd.in/ekv2D94R Better Society Capital

#WeekNote 16 (18-06-24) Delayed half-baked thoughts on #SocialFinance after attending the first day of the Social Finance Forum hosted by Future of Good and Common Good Solutions. My understanding heading into the forum was that #SocialImpact bonds funding social interventions/services based on the economic value of downstream money saved by actually "fixing" the problem being addressed. An initial review of SIBs related to homelessness quickly surfaced several papers denouncing their efficacy and suggesting they can end up costing more. I entered the event sceptical but open to learning. 3 good things 😁 👍 Being introduced to the concept of #SocialProcurement by Shaun Loney of Encompass Coop. Different to the investment fund-mechanism of SIBs, in Social Procurement government pays an agreed upon amount for specific #SocialOutcomes e.g., 100 less refugees on social assistance, 100 children with lower diabetes, 100 less encounters with the criminal justice system. This concept made immediate sense to me and directly addressed some of my SIB concerns. It feels like an innovative way to fund more transformative systems/services than currently possible within existing funding models. 👍Learning about the many social enterprises launched by Encompass Co-op, including Build Inc - an Indigenous building contractor that started out with the requirement to have a criminal record to be considered for a job (link in comments). Now with gov and private contracts to provide building maintenance/reno services, their social impacts include: "employs neighbourhood people, cuts crime, decreases EIA rates, and builds the next generation of the much-needed workforce". 👍Learning more about the many ways that Impact Venture Funds can be used to advance services and products in a particular problem space, e.g., Daniela Pacheco's Empodera Impact Capital which funds much needed products and services that increase #WomensHealthcare access in Latin America.  2 challenges 😬 👎It occurred to me when I was listening to the various talks that the thing that sits *most* uncomfortably to me with is that we are choosing to apply tools of the current extractive capitalist system to fix the consequences of the current extractive capitalist system. Seeing investors choose to invest in initiatives that do good is long overdue, but I question the timing of transitioning to a model that depends on economic growth when we are entering a time when #degrowth is what is needed for us to live within our planetary boundaries. Or maybe this is the type of growth, growth of the social impact sector, that is required to help us do that? Definitely more to learn 🤷  👎Keeping my weeknotes within the LI post word count 😬 Time to write longer posts elsewhere? Or figure out how to just get to the point sooner. 1 upcoming thing I'm excited about 😍 👏 Beating this week's heatwave by getting out on the kayak.

Cllr Ammar Naqvi, Barnet Council Cabinet Member for Financial Sustainability and Reducing Poverty recently wrote in the Barnet Post about how Barnet Council is caring for people, its places and the planet. In his article he highlights how the council has been achieving its goals via its first-ever Social Investment Impact Report. The report shows the significant achievements and the progress we have made thanks to working with residents, businesses and partners to drive positive change and improve our community. https://lnkd.in/e7kUgu-Z

The groundbreaking approach that can change how we invest in social and environmental change: Impact Bonds. Bonds as a financial instrument are quite well established. In 2022, the global bond market totalled $133 trillion. The global bond market has grown seven times over the last 40 years. Are the bonds referred here the same as the ones which total $133 trillion globally? The development impact bond (DIB) featured in this article is different. What exactly are development impact bonds? The one featured in this article is a way of more efficient allocation of capital. This serves for developmental causes. A grant is generally given to an NGO, and then there is dependence on the execution of that body. In case of a DIB, there is active management of the money and allocation is shuffled based on performance. The performance is measured by pre agreed key performance indicators. Can DIBs be an instrument of social and environmental change? The article gives evidence of the same, for a particular case. Can there DIBs which are similar to the USD 133 market? They can be borrowing instruments. The interest rate for the borrower goes down if some results are attained. The commercial lender (say a bank) still gets the same return. This is because philanthropy/ government body gives a “interest rate subsidy”. This subsidy comes only if targets are met. How does all this add up? Governments/ philanthropies spend money for activities like, education. However, very often these activities are not linked to results. In the case explained in the article, a high% of women secured employment. They were also able to be keep the job much longer than usual. This was due to incentives built in the DIB. In the case of the article, the philanthropy/ government got better social return on its money in comparison to funding classes. By deploying funds in DIBs, instead of just classes the social returns are much higher. The same kind of impact can be structured in a borrowing instrument DIB as described above. So, is this scalable? Can it form a significant chunk of the USD 133 Trillion markets? The DIB described in this article is like fund management. It is not a borrowing instrument and thus is not a part of the global bond market. The DIBs which are borrowing instruments are more likely to be scalable and be a part of the USD 133 Trillion market. What are the hurdles to scalability? The incentives in the DIB need to be very carefully set. The outcomes to be achieved need to be measurable. This is somewhat like a mission statement of an organization. Not exercising care here can lead to misdirected effort. This means that there is a need for careful customization. Also, the legal and regulatory requirements are onerous. The need for customization generally implies a limit to scalability. Some standardized and proven “desired outcomes” may come by. For scalability, there is a need to create some standards and templates. Thanks Tushar Thakkar for the guidance.

Social Investment is an idea worth trying. It won’t be perfect, mistakes will be made. That’s true of any new programme. The opposition and media will lay into any examples of it “failing”. Just like the last Oppposition layed into the big disruptive changes the last Government made. But there are good reasons to pursue it. One of the best comes from Matthew Hooton in this article: “But this (disruption) can’t possibly be worse than the status quo, where taxpayers’ money keeps going to organisations and programmes that have failed but are politically powerful among the Wellington bureaucracy or are popular with party donors.” It am perpetually dismayed by the funding that goes to NGOs with a well known brand or with a popular individual attached when there are much more effective, but less popular, alternatives. Even worse when the alternatives aren’t even considered. So yes, let’s try Social Investment. Let’s find out what works and what doesn’t. And let’s be prepared for a bit of creative disruption. Or we could keep doing the same old stuff and getting the same old results.

As we edge closer to the UK election, one crucial sector seems glaringly overlooked by politicians: social enterprises and social investment. Despite past support, today's manifestos from major parties lack any mention of these critical drivers of societal change. 🤔💼 In 2010, the Conservative Party proposed the "Big Society Bank," now Better Society Capital, showcasing a commitment to social investment. By 2015, all parties recognised the importance of social enterprise. Fast forward to today, and the term is conspicuously absent from the current manifestos. This shift is disheartening, especially given the increasing challenges faced by the UK, from poverty to mental health crises. 👉 Bayo Adelaja MBE, CEO of Do it Now Now, expresses her disappointment, calling the omission "insulting." She highlights that social enterprises are pivotal in addressing issues that the public sector struggles with. Dean Hochlaf of Social Enterprise UK argues that no future government can solve the country's problems without social enterprises. These entities not only generate profit but also prioritise social responsibility and community investment. 👉 Nick Temple, CEO of Social Investment Business, points out that Labour's goal to leverage private investment aligns perfectly with the social investment sector's expertise. Yet, this potential remains untapped in the manifestos. 👉 Chris Turner of B Lab UK calls out the missed opportunity to drive better business practices. He underscores the importance of recognising "business for good" as a catalyst for sustainable economic prosperity. Despite the lack of explicit mentions, there is hope. Former Labour leader Gordon Brown supports social investment, and there are indications that the sector's values resonate with broader political objectives. The emphasis on health, homelessness, and social inequality in manifestos suggests an implicit acknowledgement of the sector's relevance. The takeaway? The social enterprise community must advocate and demonstrate its indispensable role in achieving political and social goals. As Tessa Godley from Better Society Capital advises, it's about playing a medium-term game, aligning with political thrusts, and showcasing how social impact can drive both economic growth and social change. #SocialEnterprise #SocialInvestment #UKPolitics #ImpactInvesting #FutureOfBusiness #InclusiveGrowth #Elections2024

I fully support this. It's crystal clear that to create the happier, healthier futures everyone in society deserves, we need to place #socialenterprises at the heart of policy and investment. If our current #policymakers are brave enough to #embracechange and #thinkdifferently, then trust me, the #socialchange we all dream about will become a reality sooner than you think. #hope #opportunity #purposedriven

Thanks to Sir Stephen Timms for spotlighting our work and showcasing the impact of social investment in channeling private funds to public benefits, from building homes for people facing homelessness to funding preventative care to cut NHS waiting lists. He details how this market has experienced substantial growth, providing positive social benefits to underserved groups across the country. He says, "We need existing resources to be spent smarter. Better Society Capital projects that a £100m government grant could, over the next decade, attract in an additional £650m from investors. This could provide housing for 23,750 people and generate £1.1bn in public spending savings." The article underscores the opportunity for an incoming government to reallocate existing funds and scale the amount of social investment in the UK. Visit the link below to read how social impact investment can deliver inclusive growth, to address regional inequalities and help all of Britain thrive: https://lnkd.in/gbYmKzj9 #SocialHousing #SocialImpact

UnLtd has joined social economy allies to offer smart policy solutions for the next government to tackle pressing social issues and improve living conditions in the UK with #socialentrepreneurs. For this we need more private as well as public investment, both of which are chronically low as a share of UK GDP.   We are among 35 organisations proposing four measures in a letter to the Financial Times:   🤝 Create a Local Community Growth Fund to attract private investment into opportunities identified by communities across the UK. 💡 Introduce incentives that encourage investors, whether banks, pension funds, or foundations, to invest for long-term sustainable and inclusive growth. 🔎 Improve financial inclusion and access to fair banking by establishing a Financial Inclusion Taskforce. 🚀 Spend smarter, using tested outcomes models, to mobilise private investment for more cost-effective delivery of public services like healthcare   To learn more, visit https://lnkd.in/eq3xgXCM and https://lnkd.in/ePZFWDnH   #SocialInvestment #GeneralElection #BetterBritain

In September, the Future Social Care Coalition launched their Carenomics Report, making the clear economic case for #SocialCare. The rationale for increased investment in Social Care from an economic standpoint is undeniable. Social Care investment would support long-term #EconomicSecurity, resilience, and growth in all parts of the UK. Allocating resources to Social Care is not merely a question of #SocialJustice, but a strategic necessity for constructing a more robust, inclusive, and meaningful economy that ensures the well-being of its citizens. We cannot afford to overlook the value of Social Care any longer. Read the full report here - https://lnkd.in/eMeNAw4T