It’s an important day for social impact bonds (SIBs) as London-based youth charity, Think Forward, has successfully delivered one of the first social impact bonds in the UK to tackle youth unemployment and provide a return to investors.
Southmead is an out of town estate, a few miles from the centre of Bristol. It’s a great place with a real buzz and lots of positives, but it also has its challenges. Southmead has the lowest life expectancy in Bristol, more than 9 years lower than the neighbouring ward of Henleaze, and we’re involved in many projects to try and address that. We want to improve people’s wellbeing and hopefully have an impact on their life expectancy.
The Department for Work and Pensions’ Innovation Fund was launched in 2012 to support payment-by-results programmes that enable disadvantaged young people to participate and succeed in education and training. Big Society Capital has invested in five of these Social Impact Bonds, including Think Forward and New Horizons. This summer, the first cohorts of young people on these two programmes sat their GCSE exams, and far exceed all predictions.
One thing that has grown quite rapidly in UK social investment over recent years is the range of available products. Whether social property funds, social impact bonds, community shares or soon a wider range of ‘smaller ticket’ products encouraged by the Access Foundation’s Growth Fund, there have never been so many social investment products available across the capital spectrum.
Last week, in partnership with a number of charities and social investors, we submitted a proposal to the Spending Review calling for a Local Outcomes Fund to radically improve current approaches to supporting vulnerable beneficiary groups.
"It is a time of unprecedented change in pensions. Auto-enrolment creating millions of new pension savers, there will be £600bn in defined contribution schemes by 2030 and Government has ambitions to create a savings culture. However, current experience suggests that this will be hampered unless individual savers can meaningfully understand and engage with their savings..."
Social investors come in all shapes and sizes – from specialist funds to high-net-worth individuals to ‘retail investors’, normal people like you and me. Ultimately, what we think is important is that any charity or social enterprise who is seeking social investment is able to do so from whichever investment sources are most appropriate to their investment proposition and organisation.
Having previously managed a European Social Fund project, I’ve developed a very close eye for detail, dealt with a lot of data and have experienced a payment by results contract. Despite this, I don’t think anything could have prepared me for my next step into the world of social investment.
Since the launch of the Peterborough Social Impact Bond (SIB), the SIB market in the UK has continued to grow. To-date there have been 31 SIBs in the UK, with more than 50 SIBs in development locally, and more central government outcome-based programmes to be launched in the next few years.
Last month saw an important milestone for Big Society Capital: the first investment redemption from our portfolio. Scope, the disability charity, repaid the £875,000 investment we made via Investing for Good, the social finance intermediary who arranged and underwrote the transaction.
Futurebuilders was perhaps the big social investment initiative of the noughties. What can social investors today, including Big Society Capital which is one of the big initiatives of the current decade, learn from the Futurebuilders experience?
Corporate social investment is likely to come from pioneering companies who have piloted targeted social investment approaches, and then take them to scale through more meaningful engagement with the business. The most successful adopters will go well beyond a PR-focused approach and excel at identifying strategic opportunities arising out of social investments.
Writing in today's Guardian, Katie Allen looks at how K10 is using social investment from Impact Ventures UK (which Big Society Capital invested into) to support young people into apprencticeships in the construction industry.
In 2014 Golden Lane Housing (GLH) faced a challenge. It was a problem faced by many voluntary organisations and social enterprises and it was this: how to get capital to expand and develop the business.