Discussing social investment in the House of Lords

3 November 2016

Our Chief Executive Jonathan Jenkins was invited by the House of Lords to give evidence to the Select Committee on Charities. He blogs on this fascinating (if slightly nerve-wracking) experience.

Earlier this year the House of Lords appointed an ad-hoc committee "to consider issues related to sustaining the charity sector and the challenges of charity governance."  Why did they do that you may ask?

It’s fair to say that the charity sector has received a fair deal of scrutiny in recent years. The collapse of Kids CompanyThe anti-advocacy clauseFundraising scandals. Not to mention general cuts in funding that have left many organisations fighting to stay afloat. This committee was bought together to consider the challenges faced by the sector and are due to publish a report by 31 March 2017.

We responded to their call for written evidence and concentrated our thoughts on the barriers and opportunities for social investment. I then got the call to go and answer questions in person.

I must admit I’ve never given evidence to a parliamentary committee before. I had visions of being grilled à la Rupert Murdoch or Mike Ashley. I was a tad nervous….

Thankfully my nerves were misplaced as the committee was very much in fact finding mode. Giving evidence alongside Caroline Mason, Chief Executive of Esmée Fairbairn Foundation, and Ben Jupp, Director of Social Finance, we were gently probed on specific issues rather than skewered for sound-bites or gotcha moments.

This allowed the opportunity for a genuine discussion on the big issues for social investment today.

Hopefully, I was a good witness. You’d have to ask the committee members to find out. But if there were three things I was trying to get across in the session they were...

1)      We need to make sure social investment remains relevant to charities and social enterprises. I think too much time has been spent on complex and exciting products rather than trying to meet the demands of organisations who need finance. Inevitably, Social Impact Bonds have received a lot of airtime. They do have a place and in the right situation can help deliver tremendous impact. However, they are only one piece of the puzzle.

2)      We need to find a way to take more risk. Social investment should really step in when mainstream finance can’t. If organisations can get the finance they need from a bank then they should do so every time. Our job should be to step in when they won’t. Unfortunately, too many of the structures we’ve built aren’t able to take that risk and build a track record to encourage mainstream investors to come in after us. This needs to change.

3)      Big Society Capital has an opportunity. With a new CEO and a strategic review around the corner Big Society Capital now have a tremendous opportunity to ask the tough questions that could help them be more effective. Do they have the right money? How long should they exist for? This is moment to try and answer these questions.

The fact that we are having this type of inquiry shows just how far we’ve come and how developed social investment has become in the UK. Successive governments have done a fantastic job of supporting the infrastructure required to get money where it's needed. With the right tweaks and changes it could work even better. We need to embrace the opportunity to do that.

You can watch the full session on the Parliament website.

Jonathan Jenkins was Chief Executive of Social Investment Business from September 2011 - March 2017.

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