When the pandemic took hold in 2020, I wonder how many people (like me) pondered how social impact investment would play its part in supporting the continuity of vital services being delivered by social enterprises, charities, and community businesses. At that point, even more than before, borrowing money when future income was and continues to be so uncertain probably looked impossible.
In August of last year I wrote this blog, looking at how we could collaborate with partners to understand the extensive and numerous surveys, reports and research to help us answer that all important question - How could social impact investment offer support?
Perhaps none of us really imagined a year on, we would still be in the grip of a virus that has pervaded the world. The pandemic has exacerbated the pre-existing injustices and spotlighted imbalances so they are no longer tolerable, along with helping us to understand that kindness and community are essential ingredients of our society. The services delivered by social enterprises, charities and community businesses have played a central part in helping us cope and continue to do so as we cautiously look to recovery. Commerce and profit are essential parts but not the only economic imperative required to realise the opportunity to #BuildBackBetter.
A year on we have revisited the key trends we reported as ‘emerging’ in 2020 and have reflected on the responses, challenges and opportunities that have presented since.
Lots has happened
How do we hang on to the ground gained and ensure the social sector is not just relied upon to be part of an emergency solution? As we revert to business as usual, social enterprises and charities need to be on an equal footing with mainstream business. To do this and to respond to ongoing demand, we will need more funding, including repayable finance.
Old imbalances are no longer tolerable
The pandemic has put under the microscope the imbalances that exist across marginalised, racialised and left behind communities. Social investors are stepping up whether through specific funds, engagement programmes, transparency of investment data, or appointing lived experience to ensure more informed decision making. There certainly is a long road ahead, but it feels like we are on the right path.
We all need to walk the walk
Getting our own houses in order is a fundamental building block. Many of the very organisations who represent and support our sector have perhaps taken this for granted for too long. Getting expert advice, embedding lived experience and asking ourselves those really difficult questions to effect change must be a priority and not an optional extra.
We can be fleet of foot
It arguably took the extremity of a pandemic to see what is possible, but we probably produced some of our best work. Now we need to ensure we apply these lessons proportionately, so we can match the pace, risk and opportunity as part of social investment’s support for the recovery.
Realising the social in social impact investment
It is one of the most frequently asked question I have faced during my time at Big Society Capital. If you have to pay it back and it isn’t cheaper then what is social about it? The proof really was in the pudding! Flexibility, deferrals, non-financial support, grant alongside repayable finance and, ultimately, it was always about relationships and creating impact.
Some are more equal than others
Not just a literary quote and a statement that is hard hitting. When broken down what it means to the social sector is that roughly a third of organisations are struggling to survive, a third have reimagined their business models and are optimistic for the future and a third have thrived, seeing real demand and buyers of their services.
Social issues that have been at the forefront of government initiatives like homelessness, required immediate action to save lives. Big Society Capital has committed £30 million investments alongside an additional £30 million from other investors to meet urgent needs, giving hope that social investment can play a significant role in helping to eradicate this most basic human need for a safe place to stay.
Every cloud has a silver lining
As an eternal optimist, this resonates with me personally. Business Bounce Back Loans and the Coronavirus Business Interruption Loan Scheme (CBILS) showed the real power and potential that government-backed guarantees have to transform the landscape. We are cautiously optimistic that there is support for the longer-term use of this intervention. We will work tirelessly with partners to try and unlock this key mechanism which will ultimately make loans more easily accessible and more affordable.
The power of together
Whether in successfully lobbying for the extension of Social Investment Tax Relief, working together to bring a social sector accessible version of CBILS in the shape of the Resilience and Recovery Loan Fund or supporting the #NeverMoreNeeded campaign, we have witnessed what can be achieved together. Along with our friends, colleagues and partners from across the sector it should be our collective default to go forward together to see just what else we can achieve.
If I was worried last year how much the pandemic might set back social enterprises’ and charities’ willingness to understand and embrace how social impact investment can support them, that thought has been well and truly erased.
There is ever more need, and ever more desire to effect change so putting the money to work should be relatively easy, right?
Read the full report Mapping the Needs: one year on.