What is social investment
Social investment is repayable finance provided for charities and social enterprises. That means that it is not a grant but is money that the investor:
- Expects to get back (often with interest)
- Expects to help create positive social impact
To find out whether social investment might be right for your organisation and for help on how to find it, we strongly recommend Good Finance
Good Finance was designed to help charities and social enterprises navigate and access the social investment landscape – and to understand who and what is out there.
There are three main reasons why social investment has become more important and prominent:
1) It recycles the money we have: Because social investment returns to the investor, it can be used again to support more social enterprises.
2) It attracts new money: Social investment can attract money from new sources: from individuals, mainstream finance, or the private sector. This can help add to the existing money that is available.
3) More organisations can use it: More social enterprises are trading, and trading means that income is being earned and there is the potential for money to be invested and paid back. Social investment can play a role in supporting the growth or sustainability of social enterprises.
This does not mean that social investment is necessarily right for all. Not all social enterprises need to take on this sort of finance – some may never need it and instead grow organically through growing their customers.
To learn more:
What does Social Enterprise UK do in social investment?
Social Enterprise UK gets involved in social investment in a number of ways, because we want it to work better for our members – and access to appropriate finance is still the biggest barrier for many to doing more.
We do this through:
research – in the State of Social Enterprise, we ask social enterprises about the money they need, what amount, what they use it for and more to help inform and influence those who provide it.
delivery – we are a delivery partner to Big Potential, an investment-readiness programme; we deliver awareness events, 1:1 diagnostics and help assess grant applications.
networks – we chair the Social Investment Forum, a network of social investment intermediaries – to help them work better together in policy and practice; we also convene a sub-group focusing on impact.
advocacy – we sit on the Big Society Trust board (which oversees Big Society Capital), on Power to Change’s Stakeholder Advisory Group, on Social Stock Exchange’s Admissions Panel and we work directly with the social investment team at the Department for Culture Media and Sport: all to represent the views of social enterprise round the table.