Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
organisations, directly or through funds, with the intention of generating a measurable, beneficial social
and environmental impact alongside a financial return (SIITF, 2014a).
4.4 Essentially the terms – impact investing, social investment and social impact investment – mean
the same thing. For the purposes of this paper and the OECD research, which has also been part of the
international social impact investment initiative, the term social impact investment is used.
4.5 At this early stage of development in the market, many players prefer to keep the definitions
broad, also as a way to engage more people in the market. However, for the market to progress globally, it
will be important for definitions to be clarified to make sure that there is a common language and
understanding of what is considered social impact investment – and what is not. This chapter therefore
seeks to deepen the discussion about social impact investing to provide a framework identifying what
might or might not be considered to be SII.
4.2. Definitional Characteristics, Attributes and Eligibility
4.6 While there is a growing consensus about the broader framing of social impact investment, there
is significant debate about the definitional scope of SII. This section seeks to provide a framework for
working towards a SII definition by focusing on a set of defining characteristics and attributes as well as
raising questions about possible eligibility boundaries. The goal is to allow enough flexibility for the
consideration of various forms of SII, while helping to clarify what might be considered to be in or out of
the commonly understood meaning of SII.
4.7 A number of characteristics can be used to describe a transaction and to classify it as either
corresponding to SII or not. We have identified seven key characteristics (dark blue boxes in Figure 4.1
below) which are described further in the subsequent subsections. 7 A chart of all attributes and possible
eligibility boundaries for each characteristic is provided in each of the corresponding sections below and
then consolidated at the end of this chapter.
4.8 The characteristics are grouped according to the SII framework components described earlier.
For example, while return expectations are identified at the investor level, the measurement of social
impact is typically carried out by delivery organisations. Transactions are at the centre and are the units of
assessment.
7 . Other characteristics could possibly be used. However, these seven characteristics are necessary and
sufficient to: i) identify the SII “space” in the economy; ii) cover all SII players (and the profiles) relevant
for a definition and iii) discuss the scope for policy action.
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