In the last two weeks I’ve been at two major social impact investing events, both of which were conducted in the language of investors, and both of which left me actively searching for the perspective of social purpose organisations. There’s a lot of discussion about what social purpose organisations need to do to get investment ready, but where’s the conversation about what investors need to do to get impact ready? On September 3rd, the second night of the SOCAP conference, I attended an event held by Echoing Green, who support young social entrepreneurs. One of the young entrepreneurs was attending SOCAP. Four of her friends excitedly asked her what it was like. She said “I don’t know. I’m still trying to figure out if it’s for me. I go to these sessions, but I don’t understand what they’re talking about.” I asked her what the issue was. She said the language and the concepts were so foreign to her that she struggled to find meaning in the proceedings. Only that morning, Sir Ronald Cohen had said, “that’s what impact investment is about: enabling social entrepreneurs whether they’re working through not-for-profits or for-profits, to raise the capital they need in order to improve the lives of others, or the environment”. How did we fail to communicate this to our target market? Continue reading
Having just attended the Social Capital Markets Conference in San Francisco (SOCAP), I was surprised at the lack of conversation about retail investment. ‘Retail investment’ means open to anyone, the individual on the street. It’s sometimes referred to as ‘crowd-investing’, ‘peer-to-peer lending’ or in Australia has been referred to as ‘crowd-sourced equity funding’ (where ‘equity’ means debt or equity).
The majority of social purpose organisations needing funding require smaller or riskier deals than impact investment bodies are offering, and the retail investor has the potential to address this gap. Continue reading
There are two social impact bonds in Australia that have raised investment and are delivering services. They have been called “Social Benefit Bonds (SBBs)” by the New South Wales Government, the state government that initiated them. They are the Newpin SBB and the Benevolent Society SBB and both of them work to strengthen families to ultimately reduce the need for children to be placed in care outside their homes. Investment for both deals was open to wholesale investors upon application. One parcel of investment in the Newpin SBB was transferred to a retail investor in August 2014, so is not shown on the chart. Also interesting to note is that the Benevolent Society, the charity delivering services for one SBB, has invested in the Newpin SBB, as well as in their own. A breakdown of investor types for each SBB is below.
(Source: Presentation by Ian Learmonth, 2013, p.14)
(Source: KPMG Evaluation of the Joint Development Phase of the NSW Social Benefit Bonds Trial, 2014, p.30)