Big Society Capital (BSC) today published their annual review for 2015. The review reveals an impressive and encouraging picture for the nascent social investment market.
Market Growth
At the end of 2015, the review outlines that social investment in the UK was worth over £1.5bn and is being used by over 3,000 charities and social enterprises (SEs) to improve society. The cumulative amount drawn down from BSC alone was £68mn at the end of 2015, nearly double that from 2014. Teamed with their co-investors, this reached a total of £195mn reaching over 270 charities and social enterprises.
Capital Deployment
Of the organisations to receive investment, roughly three-quarters were asset-locked charities and SEs and just over 10% were non asset-locked SEs. The remainder went to management fees paid to intermediaries and capital for arrangers. Deployment of the capital occurred through a number of diverse products including 41% made available to charities and SEs through funds and social banks, 39% through the purchasing of property (mainly to help charitable service delivery) and 8% helping charities deliver services using Social Impact Bonds (SIBs).
Messages from the Chair and CEO
Sir Harvey McGrath, Chair of BSC, details how “social investment is not just about numbers. It is about people – people who are using social investment as a tool to help their organisations do more; people who are investing their money for social impact; and the people whose lives are made better by the work of charities and social enterprises.”
Hearing from the new CEO Cliff Prior, formerly at UnLtd, he says “We are on the road … to the point where social investment can be a valuable, understood and accessible tool”.
Of possible interest to the Worthstone community, Sir Harvey highlights the “GET IT campaign to build understanding of Social Investment Tax Relief” with Cliff describing that “[w]e have collaborated with others in the sector to achieve a supportive tax regime and regulatory systems which will enable more progress”.
We await the FCA’s report on regulatory barriers to social investment following its call for input at the end of last year to hopefully compliment this work.
Noteworthy Milestones
BSC reports on the investments that were repaid to them in 2015, which includes the completion of the Department for Work and Pension’s Innovation Fund SIB. Furthermore, by the end of 2015 the report details:
- three SITR funds were launched
- SIBs had £14m of investment in them spread across 18 different investments and
- equity-like products were worth at least £32m across more than 120 investments.