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Social Impact Investment
Transcript of Social Impact Investment
Is it sustainable ?
Investment v grants ?
Not enough money available
Terms and conditions are too onerous / hard
Why worry about social impact?
Not enough investible opportunities
Too risky, not enough return,
no collateral/ security etc
: social investment
means different things to different people
& Corporate Social Responsibility
12 Drivers for Growth
#8. Social Business Initiative
What is a social business?
The Commission uses the term 'social business' & 'social enterprise' to mean:
social impact priority (can make profit)
produce goods and services as part of the market economy
entrepreneurial and innovative
uses financial surpluses to achieve social goals
accountable and transparent
management involves workers, customers and stakeholders
A new financial instrument of €90 million to improve social businesses' access to funding
EIF launched Social Impact Accelerator (2013)
€60 million Fund of Funds
with Credit Cooperatif & Deutsche Bank
2014 - 2020 Budget
Risk is assessible
Volatility (or lack of)
Public sector austerity: consider ALL sources of money
Tailored to suit cash-flow of organisation
Investment is complementary to grants
Sustainable finance: money is recouped & recycled
capacity building &
engaged investor approach
An emerging market
Journey of exploration
Trading revenue, sales
(with thanks to Robert Kawalko, European Fundraising Association)
Traditional Sources of Funding
EU 2020 Goals
2007-13 budget figures
(EuSEFs) European Social
Regulation (not directive - optional)
Voluntary new "passport" for funds
to assist cross-border fundraising
Streamline regulatory and compliance requirements - reduce costs
Common standards, processes and reporting
Groupe d'experts de la Commission sur l'entrepreneuriat social
Improve access to funding
Improve legal environment
Inclusive, sustainable, smart growth
Karl H Richter
Single Market Act
NGOs / Civil Society
Accelerating Market-Driven Partnerships (AMP)
Unlocking economic value
while delivering positive social and environmental impact
Social Enterprise Mark
g an asset lock
objects that made it clear it was "primarily concerned with providing b
enefit to society"
a constitutional requirement to exist for social benefit
safeguards to ensure its social mission continued in the case of an ownership change
remuneration levels that "reflect social sector norms".
Like other businesses:
compete to deliver goods and services in market
Legal "wrapper" on top of:
Company Limited by Shares
Company Limited by Guarantee
Permits for-profit companies that seek to create significant social value
"Level playing field"
Social Business or Social Purpose Company:
for-profit business with social objectives
social objectives not necessarily primary objective
Differently from typical business:
social and environmental mission
focused on the community they serve
profits reinvested towards achieving social/ environmental purposes
Specifically defined community interest/ beneficiary group
Limits to profit distribution
Registered with regulator - ongoing monitoring
“businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.”
Bill passed on 12 March 2013
Mainstream investment &
Socially Responsible Investment (SRI)
An investment priority for social businesses & enterprises in the ERDF and ESF regulations.
(up to €40bn/ year)
G8 Taskforce on Social Impact Investment
(Source: EVPA 2011)
London Stock Exchange, Oct 2011
The text of the banner in this image has been digitally altered,
it originally read "Capitalism is crisis"
9 Jan 2012
Social Market Economy
NGO's / 3rd sector
Darling, it all needs money...
Welfare State is dead...
Long live the
Public sector austerity
A new economic paradigm?
The rules are changing
Overcoming Social Exclusion
Non-profit holding company for social enterprises
Active across France, la Réunion, Guyane and Mayotte.
Finances ‘social economy’ organisations
General banking services
Number of beneficiaries:
Number of employees:
Number of businesses:
Scale & reach of organisations
Amount of money
Long track record
Helping people with Asperger Autism become employable
Area of activity:
Year of foundation:
Berlin, later Germany and parts of Europe
AUTICON utilizes the special skills of people with Asperger Autism, trains them to be software testers and deploys them as consultants in IT departments within large and medium-sized organisation.
People with Asperger Autism
IT companies, companies with IT departments
Innovative service delivery model
Save welfare bill
Enhance quality of life
Local Authorities can be both...
1) Social Investment as source of capital
2) Help deliver programmes & projects
1) Deploy own resources as social investment
Drive value for money of public sector budget
Recycle and reuse money
2) Encourage LA pension funds to invest
"It is urgent that governments throughout the world
commit themselves to developing an international framework
capable of promoting a market of high impact investments"
“Investing for the Poor” 16-17 June 2014
'Commissioners' of social outcomes via
Social Impact Bond & payment-by-results contract
Promoters of social impact investing
Report - 16 September 2014