The Social Metrics Commission recently issued the report on their work to measure poverty in a more meaningful way. They estimate that 14.2 million people in the UK live in poverty, including 4.5 million children. These stats are shocking and underline the vital role of so much of the charity sector and social economy, working in many ways to address the root causes or the effects of poverty.
Big Society Capital (BSC) believe that social investment (i.e. repayable finance used to create impact) can be (a small) part of the solution alongside the social economy sector’s other funding sources. Money provided upfront by social investors is used by social enterprises and charities to finance income-generating models so that they are able to make a greater difference in addressing poverty.
This includes organisations dealing with the consequences of poverty, such as Fareshare SW, tackling food poverty by distributing surplus food to those in need, and who have used social investment from fund manager Resonance to help fund a catering social enterprise to generate money for their core work. Or Hey Girls who are addressing period poverty through selling sanitary products on a buy 1 donate 1 basis, and have received a small loan and mentoring support from Big Issue Invest to help them grow.
Some organisations are tackling the underlying causes of poverty, and have benefitted from social investment to grow their work. For example giving access to credit to people on low incomes on fairer terms from Fair For You (who have accessed investment from Social Investment Scotland and a number of other investors) Or providing employment in areas where traditional industries no longer exist such as Barnsley Community Build (with investment from Key Fund) Or Child Dynamix (with investment from Social and Sustainable Capital) who provide quality early years childcare in deprived areas.
At BSC our purpose is to improve people’s lives in the UK by connecting social investment to the charities and social enterprises that are delivering impact. We work with partners across the worlds of charity, social enterprise and housing associations, foundations, investors, fund managers and government to get social investment to where it can be most effective in enabling greater social impact.
Many of our investments tackle some aspect of poverty, including in affordable housing and into funds that invest in social enterprises such as those above. But we know that delivering products and services will never be the full story and that the campaigns and influencing work to change policy is often key to lasting change.
We are proud to be a founding partner alongside the Joseph Rowntree Foundation in setting up Fair By Design, an initiative designed to eliminate the poverty premium through both an investment fund (into social enterprises that are providing solutions), but critically also a campaign hosted by the Barrow Cadbury Trust. The campaign has just launched a roadmap to end the extra costs of being poor with recommendations for key stakeholders including government and business.
How the impact enabled by social investment is articulated and demonstrated is clearly a key focus in our work, and obviously, an area that Social Audit Network (SAN) members live and breathe. BSC provides access to impact tools which are available to anyone and our support is focused on fund managers & the organisations we invest in. As part of our ongoing work around data transparency, last year we also shared the social impact metrics being tracked by front-line investees.
Practice and expectations from social investors vary – our core tenet is that whatever is measured should be proportionate and of benefit to the investee in how they learn, improve and influence.
Some social enterprises will be tracking the number of people they’ve worked with and the difference they’ve made to those individuals in terms of jobs, training, services or products supplied. But the ultimate social impact metric is making a dent in the recent poverty figures even if this can’t be attributed to the work of any one organisation.
We are delighted to be supporting the Social Audit Network’s annual conference on 17th October, marking the UN International Day for the Eradication of Poverty, and to have the chance to talk to and learn from experts in impact measurement.
Would you like to know more about how social investment could help address the issues you are tackling and help your organisation’s funding plans? Do you have ideas or evidence on what works in addressing poverty and inequality and where social investment could be part of the solution? If so, do get in touch with me at firstname.lastname@example.org or say hello on 17th October. Looking forward to discussions with lots of people, motivated by seeing the eradication of poverty in the UK and beyond.
Head of Engagement, Big Society Capital
For more information about social investment, see Good Finance, a collaborative project to provide access to information to charities and social enterprises.