Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
Box 3.3. Big Society Capital (BSC)
Big Society Capital (BSC) is an independent financial institution in the U.K. established to develop and shape a
sustainable social impact investment market in which social sector organisations can access the capital they need to
increase their positive impact on society. BSC was launched in April 2012 and is the first social impact investment
bank in the world.
BSC is a ‘social impact investment wholesaler’ which provides finance to social impact investment finance
intermediaries (SIFIs). These are organisations that provide appropriate and affordable finance and support to frontline
charities, social enterprises and voluntary organisations (the social sector). BSC seeks to achieve its objectives by
addressing key market failures in the social impact investment market, ultimately increasing the social impact achieved
by frontline social sector organisations.
The five key areas of activity include supporting or providing: capitalisation and balance sheet growth; risk and
working capital; sustainability and organisational growth; market mechanisms and infrastructure; advice, skills and
information.
BSC was funded from GBP 400 million in dormant bank accounts and with GBP 200 million from the four major
banks (Barclays, HSBC, Lloyds, and Royal Bank of Scotland). Most of BSC’s GBP 600 million in capital is for
investment in social finance investment intermediaries. BSC seeks to achieve financial sustainability over the long
term.
Source: www.bigsocietycapital.com.
3.41 In the U.K., Big Society Capital (BSC) acts as a wholesale investor for social impact investment
by investing in intermediaries and championing the sector to the public, stakeholders and investors
(Box 3.3). BSC has also commissioned a number of research reports on the social impact investment
market and created guides and standards for investors and social enterprises (Addis et al, 2013).
3.42 However, in most countries, intermediaries either do not exist or are not sufficiently developed to
effectively facilitate the matching of SII demand and supply. Intermediaries and advisors are hard to
finance due to high operating costs. Currently, most survive through donations. Others take transaction fees
or a share of equity. Policy makers, foundations and others can play a role in the early stages of building
the market but need to identify ways that the intermediaries can be sustainable in their own right over time.
3.43 Intermediaries, such as the Global Impact Investing Network (GIIN), described in Box 3.4, can
also play an important role in encouraging “traditional” financial players to enter the market.
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