It is exciting times for Big Society Capital and if I were the new Chief Exec, I would have difficulty in knowing where to focus as I try to grow the social investment market. Big Society Capital (BSC) is cogniscent of these difficulties and adept at using all the levers that it has available — and creating more. But something key has been left behind — and the clue is in the name. It’s the social part.

By the social part I don’t only mean what is social, and what kind of organisation is judged to deliver it – a discussion point from previous blogs. But also how are we going to value and measure the social part. Valuing social investment means that we are prepared to trade something for it, that it has an intrinsic worth. More and more young people see this and are pushing their employers to have meaningful volunteering polices and are keen to put their savings in social products. It certainly feels like this is valuing social outcomes for their own sake, rather than for what else that brings with it.

But the social investment market is sitting on the fence — as if it doesn’t really believe in the value of social impact and isn’t addressing the debate of how and if social and financial returns should correlate (and we are not even having the conversation about risk). Admittedly some investors don’t see the need for a trade off and others are happy to fudge the trade off using a repayable grant model. But we now need to address the elephant in the room and explain that if we do value social returns why do many voluntary organisations and social enterprises find that social investment does not seem to offer value — not only is it ‘expensive’, but it is also more complex — “hard work”, as one social entrepreneur stated.

To grow the social investment market the social return or ‘impact’ has to be clearly valued by society. And here lies the gaping hole in social investment to date — there is surprisingly little impact measurement around that allows us to build a true picture of how we should value this social impact.

So where to begin? The BSC outcomes matrix is a logical starting point (I would say that NPC had a hand in developing it). But this matrix needs to move into practice. BSC’s own investments should be contingent on recipients evidencing their social return in a way that allows the market to develop a track record. And that track record should be public. I recognise that many of the current investors are private equity structures and are just that — private. But this does not serve the market in the short term and that is why we at NPC have been pushing for more information to be put out by BSC. And whilst I appreciate all the moves towards transparency that BSC has put in place as a consequence, I can’t see where they are holding their investees to account over impact measurement. And I certainly can’t see how expected return and impact relate to one another.

So my recommendation to the incoming Chief Exec is to push the market harder to demonstrate impact. Recognise that measurement will help to communicate the intrinsic value of impact which will in turn allow the social millennial to make an informed judgement on how financial and social return should correlate. Maybe this way social investment might become more affordable for social enterprises.



Abigail Rotheroe works within New Philanthropy Capital’s (NPC) Research & Consulting team. She conducts research and strategic reviews for a range of clients, and leads NPC’s social investment work.