1. Social investment and
employment/skills delivery
Daria Kuznetsova–
March 19, 2013 19 March 2013

2. Social investment is for social and financial return.
Social investment is the provision of finance to generate social and financial returns
Charities and social enterprises are particularly suited to social investment. They can deliver
strong social returns but struggle to access capital via mainstream markets
Range of products – social investment provides a range of products such as secured
loans, unsecured loans and equity
Social investment is not a grant – there is an expectation of repayment of the finance, plus a
return
Growing demand- £165m of done deals in the UK in 2011 with potential demand reaching £1bn
by 20161
First Billion (2012) Boston Consulting Group 2

3. We’ve been long in the making!
2010
Final report of the
Social Investment
Task Force 2012
Launch of Big
2007 Society
Commission Capital
on Unclaimed
Assets
2011
2000 The Big Society
Social 2008 Investment
Investment Dormant Fund under Big
Task Force Accounts Act Lottery
launched 2006
Government
sets up the
Office of the
Third Sector
3

4. Big Society Capital – building a sustainable social investment
market in the UK
HSBC
Dormant Barclays
Accounts Lloyds
TSB RBS
£600m capital
Big
Society
Capital
Investors seeking Social Social organisations
investments that create a Investment requiring capital to allow
positive social impact Finance the organisation to grow
beyond financial return Intermediaries to scale
Operating Principles
Independent Transparent Wholesale Self-sufficient

5. What is an Intermediary?
Investor Investor Investor Investor
Who is an intermediary? What does an intermediary do?
• Investment Readiness Providers • Select investments
• Social Funds Intermediary • Monitor social and financial performance
• Social Lenders/Banks • Diversify risk
• Social Impact Partnerships • Raise capital for future investments
• Market Infrastructure
Frontline Frontline Frontline Frontline

6. Already the market is changing – in 2011 there were only a few
places to go if a social organisation needed capital
Investment Readiness
Social Funds
Social Enterprise funds
Specialised funds
Social Lenders
Social Impact Bond
Partnerships

7. At the start of 2013 there were many more
Social
Investment Readiness Incubator Fund
Social Funds
Social Enterprise funds
Specialised funds Results
Fund
Social Investment
Social Lenders Market CIC
Social Impact Bond
Partnerships

8. We have made £56m of commitments of 4 broad types
General funds – Specialised funds – Social Impact Bonds – Operating
increase supply of invest with themes provide upfront capital for intermediaries–
capital available such as sectors or social ventures delivering provide support to
to social ventures regions services under PbR social sector
contracts organisations
NESTA Impact Franchisingworks Capitalise SIB Social Stock Exchange
E.g.
Investment Fund License Fund
Invests in social Provides finance to Supports a programme to Connects socially
enterprises that purchase franchise helps address the root causes motivated investors with
use technology and contracts and enable of low attainment in schools in social purpose
Approach
innovation to solve unemployed and the Cardiff and Newport businesses that need
social issues financially excluded area, such as literacy problems capital.
people in Manchester and low self-esteem/belief.
to set up their own
franchise businesses.
Nesta The Shaftesbury 3SC Social Stock Exchange
SIFI
Partnership

9. We see several areas of opportunity for social investment in
employment and skills delivery
• Academic success: school based interventions to improve attainment
• Vocational preparation/employability: preparing individuals for
employment, developing skills that contribute to economic well-
being
• Improved skills for jobseekers: supporting jobseekers to enter
employment through development of work specific skills, attainment
of relevant work experience and improving motivations

10. So – when is social investment appropriate and how do you get
it? There are at least 3 steps…
Define a Develop a business The investment process itself
revenue model and impact plan
• Investment readiness
• Business plan with support
• Trading business financial model
• Approach social investors
• Public sector contracts • Evidencing social value
• Investment due diligence
• Buying an asset

11. Are you seeking social investment?
Social Sector Organisation Social Finance Intermediary
Online Expression
Directory of Intermediaries Ideas
of Interest
www.bigsociety
www.bigsocietycapital.com www.bigsocietycapital capital.com
.com