The House of Lords Select Committee on Charities published its report this week. Jonathan Jenkins, our outgoing Chief Executive, gave oral evidence to the Committee and as he moves on he reflects on the report and the potential for change.
This week my journey with Social Investment Business comes to an end. After five and half years working in this incredible organisation alongside some wonderful people I am leaving to become Chief Executive of London’s Air Ambulance.
Through a quirk of fate my departure also coincides with the publication of the House of Lords Select Committee report on Charities. I gave evidence to the committee back in November and as I said then I was a bit nervous.
Well the report is now out and the 156 page tome contains 100 recommendations that range from regulation to commissioning. Not that it received much coverage in return. For a wide ranging summary I recommend this blog from the ever wise Karl Wilding at NCVO.
However, if you’re looking for a deeper dive on the social investment side of things my final act at Social Investment Business is to give my take by focusing on five quotes from the report.
“The social investment market is unlikely to reach its potential unless further resources are put into the investment readiness of smaller charities.” (Page 83)
Over the past few years we managed several programmes to help charities get ready for investment and helped them raise hundreds of millions of pounds in investment and contracts. We know that grants for specific and targeted support make a huge difference to small and medium-sized charities. We will be using this experience to help inform the design of future programmes.
“Government and sector leaders should do more to address the reasons for high transaction costs and work to bring them down.” (Page 85)
There is no denying that the cost of social investment can be a problem. The report lists a number of reasons for this and everyone working in social investment must make sure that the products we offer are affordable. This includes looking at the supply of money. With Big Society Capital and Access putting lots of money into the market they also need to continue to work out how they can make their money more affordable.
“Future public funding should be reoriented towards financial products with application to a wider range of charities and beneficiaries.” (Page 86)
The issue of Social Impact Bonds received plenty of attention from the committee. Ultimately, they concluded that Government has put lots of time and effort into making them work and that this has been disproportionate to their relevance for many organisations. With public resources ever scarcer, Government must think carefully about the best place to put their chips in the future. I know that Social Investment Business is aware of the need for more relevant products and is planning new ways of providing the finance that charities really need.
“While the Government has taken some steps to promote…and to encourage wider awareness of social value among public sector commissioners, we believe more could be done to maximise its potential.” (Page 49)
The Social Value Act, which requires public sector commissioners to “consider” social value, has had mixed success. Social Enterprise UK research found that only one in three councils use it in commissioning use it while a Cabinet Office review outlined a lack of use in central Government. The Act has the potential to transform commissioning leading to better services and better value for money. I hope the forthcoming review of the Act gives it more teeth.
“Social investment has potential to improve the range of financial options for some, though not all, charities. As the market grows and matures, there needs to be a continued focus on improving its accessibility to investors and charities alike.” (Page 80)
We must recognise that social investment works better in some areas than in others. We need to get back to creating solutions not products. Remember where we are going and not obsess on the vehicle that’s taking us there. I hope that everyone working in social investment heeds the recommendations of this report and adopts a laser-like focus on delivering what charities and social enterprises really need.
Thankfully, there are loads of very able, willing, smart, curious, impatient people working all across the sector, and especially at Social Investment Business. It’s been a pleasure to work with them and I look forward to watching their progress as I move onto the next step in my journey. I wish you the best of luck in yours.
Jonathan Jenkins was Chief Executive of Social Investment Business from September 2011 - March 2017.