There’s a diagram/framework that keeps being used to describe the social investment market and it drives me mad! [I’m not going to point fingers, but its use is fairly widespread, to the point where some organisations use it to label their computer files…]

This diagram assumes that your world revolves around money. When you see it, you are supposed to see a very logical display of: the supply of money; the demand for money; and the things that help these two connect.

But social finance is about more than money. It’s about people and changes in their lives. Social purpose organisations use the words ‘supply’ and ‘demand’ to talk about housing, food, services, blood…

As social finance/social investment/impact investing become more widely discussed and practised, our use of language is central to its development. Whatever our perspective, we need to use as little jargon as possible, communicating meaning effectively. We should ask people to explain what they mean, reduce our use of acronyms and assume that the world view of others is not our own.

The diagram above can be useful if we all understand what it means, for example:

It’s still a little money-centric, but it involves fewer assumptions. Is it clear enough?

Update July 2014

Until now, the bulk of social/impact investment reports have been written by investors, for investors, with a few written by policy makers trying to encourage investors. We’re just starting to see the emergence of publications on social/impact investing written for social purpose organisations. Big Lottery Fund has published Social Investment Explained, beautifully written David Floyd at Social Spider and Nick Temple at Social Enterprise UK, with support from Dan Gregory. It sets the benchmark for communication – its language and structure make it accessible to the organisations that are the basis of the existing and potential market.