HOW ACCURATE WERE OUR 2018 SOCIAL INVESTMENT PREDICTIONS?

25 January 2019

This week, NESTA released their annual predictions for the coming year on all things technology, innovation and system changes. It was around this time last year where we put together some predictions for social investment in 2018.

So here goes: a run through of our 2018 predictions (spoiler alert: not all of them came through…)

1 Political uncertainty hits the sector

A resounding yes for this prediction. In a year where we've had the on-going car crash that is Brexit, there has been very little political headspace to progress the dialogue with government on social investment (and not forgetting a lot of other policy areas).

There was little in the way of leadership and contingency planning from the Government around the potential impact of Brexit on the third sector, causing huge swathes of uncertainty (for instance, do we need to re-create EU Funds that support parts of the UK but in a Brexit form?).

That’s not to say there were no political advances for social investment in 2018. We had the Government’s response to an industry-led report on social investment and continued Government commitment to work with the investment and savings industry to support the launch of further social impact investment funds.

(Editor note: We thought we’d score Amir for his predictive powers.  A strong start with 5/5 for this one)

2 The growth of place-based funding programmes

Slow going on this prediction. Whilst the aim to grow this as a route to making more funding throughout the UK is still there, the implementation has not been. 2018 did see the launch of a few interesting place-based funding programmes, such as the first stages of the Big Lottery’s Placed Based Social Action.

However, there still appears to be a lot to do, and it will be interesting to see what comes out of Big Society Capital’s focus on developing place-based social investment, and how the further increase of funding being made available from dormant accounts by the Government could go towards supporting the growth of place-based funding. It’s worth highlighting that CAF Venturesome’s place-based SE-Assist fund, now in its fifth year, ran successful cohorts in Wales and Greater Brighton in 2018.

Score: 2/5

3 Blockchain

You might be surprised to know that blockchain has not taken over the world just yet. Last year we did see more discussions taking place around the usage of this technology in relation to social good. There are clearly potential benefits to how blockchain could support the development of social investment ranging from transparency, impact measurement and decreasing the cost of providing finance. However, we're still far from having an understanding how blockchain can work with social investment, despite the launch of several social blockchain platforms such as Alice and Disberse.

A bit of patience is required before we can say the words ‘blockchain-backed social investment funds’, however Big Issue’s ‘The Big Exchange’ platform that aims to use blockchain will be an interesting one to follow on this.

Score: 3/5

4 Growing diversity of funders

Over the past year I've seen more and more organisations look to enter the impact investing space with a lot of interest from new players.

Having attended various conferences and events these organisations range from financial institutions, asset management firms and foundations. All these potential entrants are coming at this in different ways, and with that comes different expectations around what they expect to do in the sector (ranging from those looking at a returns-based model vs. a pure impact perspective).

With the recent political uncertainty there has been a more cautious approach however, the broader trend is positive and one in which this diversity of funders will only grow.

Score: 4/5

5 User-led design in the structure of funding and commissioning

Again, one which there is significant interest and support for, but which is showing a slower than expected growth. The stand-out development of this in 2018 was the exciting ‘Leaders with Lived In Experience’ pilot that was launched by UnLtd with a grant from the Big Lottery Fund.

Whilst there wasn’t a huge development in the way commissioning changed in 2018, the new announcement from the Government around changes to its procurement practices to boost social value considerations and reduce barriers for social enterprises was a welcome development - and one that could have an impact on the potential demand for social investment.

Score: 3/5

6 The big data rush

Unfortunately no California-esque rush on this one, but the push towards a more transparent and open sector is still ongoing. There was an interesting move by Social Investment Business, which committed to value the social impact of its programmes and improve the transparency of its programmes.

As part of my role sitting on the steering group for the Social Impact Investment Group, we have been discussing how we can do more to share learnings, develop platforms for learning and share information between practitioners in the social investment sector. One to keep an eye on for 2019 and beyond!

Score: 3/5

7 The evolution of Social Impact Bonds (SIBs)

Rather than evolution, 2018 was a year that saw more reflection and thinking around SIBs and what role they play in the way we look to tackle social issues. The Government announced yet more funding into SIBs, with £48m of grant funding going to 22 new SIBs across the UK.

On the other hand, a report in 2018 from the Policy Innovation Research Unit at the London School of Hygiene & Tropical Medicine and the research organisation Rand Europe (with funding from the NIHR Policy Research Programme at the Department of Health and Social Care) said its findings show that SIBs are "no panacea for public service reform". The SIB debate continues…

Score: 2/5

8 Hitting the mainstream

Despite my ambivalence to the word, 2018 saw some interesting strides for social investment becoming mainstream. The development of The Big Exchange platform by The Big Issue is an interesting development in the sector. The continued work by Social Enterprise UK to grow the awareness and opportunities to buy social. The taskforce led by Elizabeth Corley that has begun to discuss the ways that the retail space can engage with social investment opportunities, and which I expect to grow further in 2019.

However, more must be done by the Government around this - especially the way in which it can use tax, as well as its role in the development of markets, fostering a closer relationship between social investment and the way everyday people can interact with it.

Score: 3/5

9 Collaborative ecosystems

Not quite on this prediction. We need to think about the barriers restricting the way in which we can collaborate with each other and how this needs to include all parts of society. Big Society Capital has taken a great approach, looking to engage a range of partners with the development of new initiatives to tackle social issues.

A good example is its idea of a fund to support charities that work with vulnerable women (whose steering group I sit on). This is looking to engage women’s charities, local government, impact investors and foundations. We need to do a lot more around cross-sector collaboration and explore how we can bring more diverse voices around the table. I am confident we will see more of this happening in 2019.

Score: 2/5

10 The end of the term ‘investment readiness’

Significant progress here with the likes of the Access Foundation moving away from the term and instead supporting enterprise ideas and focusing on sustainability. It was also great to see Social Investment Business come out with a statement stating the need to ditch the term ‘investment readiness’.

There has been a shift during 2018 to focus on how we as a sector can support the sustainability of organisations, with success not being tied to organisations raising investment.

Score: 4/5

So, there you have it, not a bad attempt at predicting 2018 for social investment.

(Editor note: we make this a pretty solid average of 3.1/5)

Read the 2019 predictions.