What are the key components needed for a social investment intermediary to be financially sustainable and effectively deliver products, support and/or services that benefit charities and social enterprises?
Over the past few months we’ve embarked on a new project here at Big Society Capital that aims to answer these questions.
The project serves a number of purposes for us. We’ve made almost 50 investments to date and recognise we need to dedicate more proactive and strategic support to the intermediaries in our portfolio.
We’re also acutely aware that we don’t have all the answers, and that learning and support is a two way street. So how can we shift the relationship beyond purely investor (Big Society Capital) and investee (the intermediary) to a more balanced partnership and one where there is more peer to peer support and learning opportunities?
So what have we been doing?
Our first step has been to identify what the key ‘building blocks’ are, that are the essential components for a strong, effective and sustainable social investment intermediary. As we began to map what we thought these components were, we recognised that they are likely to differ depending on the make-up of the organisations – i.e. whether the intermediary was an advisor, a fund manager, a social bank or infrastructure platform etc.
We’ve spent the last few months meeting with the intermediaries in our portfolio to test these building blocks with each of them and ask them questions like: are these the right ones? What are we missing? What do you see as the greatest challenges the intermediary sector face? Meanwhile, Access have also been testing them with their pipeline and together we’re meeting with key intermediaries and other players in the sector (foundations etc.) to get their insights. This is still an ongoing piece of work and one that means the building blocks are constantly being revised, tweaked, added to and deleted based on the valuable feedback we’re receiving.
The next step is developing a tool that allows intermediaries to rate themselves against the key components. For example, yes you might have a Board in place, but how engaged are they? Do you have the have the right mix of people on it from a variety of backgrounds? How qualified are they in identifying key risks and opportunities for your organisation? How aligned are they with the organisation’s culture and values?
While it’s all well and good identifying these ‘building blocks’ and ways of self-rating against them, in reality it’ll be meaningless unless we have some tangible solutions to fill the gaps that may be identified.
We will soon begin mapping what support is already available to intermediaries around each area. That support may come in all different forms - it may be something we offer, but equally it could well be something another intermediary of player in the sector is the expert in and therefore better placed to offer support, or there may well be existing solutions already in place.
But our objectives go beyond just individual support – we’re keen to identify through the conversations and partnerships, what are the common themes and challenges felt across the intermediary sector and look for sector wide solutions with our partners Access and others (e.g. foundations and co-investors) keen to support the sector. The latter aim of the project is closely aligned with what Access are interested in as part of their Infrastructure Investment project – and so from the outset we’ve looked to work closely together to share learnings and identify ways of working together.
Please do get in touch if you’d like to hear more about the project. It’s very much a work in progress at this stage but one that internally we recognise is vitally important if we are to build a sustainable intermediary sector who in turn are providing the right products, services and support to charities and social enterprises.