Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
4.2.1. Social Target Areas
4.14 Social target areas include a myriad of social needs in which SII can be put to work. Depending
on the context, these can range from social needs, such as disability and unemployment to more traditional
sectors, which applied in a certain context (see section 4.2.2) can have a high social impact.
4.15 Views on social areas to include in SII can vary according to the different perspectives of the
players involved in each transaction. For example, the SIITF, which during the first year included only
developed countries, focused on social issues while organisations operating in developing countries may
take a broader view. GIIN is a global network seeking to attract mainstream investors to SII so for both of
these reasons, they tend to categorize target areas in line with more traditional investment sectors.
Figure 4.3 below provides a comparison of the social areas focused upon by the SIITF with the sectors
outlined by the GIIN for global investors and intermediaries. Surprisingly, only three areas overlap (health,
affordable housing and education), which illustrates how broadly perspectives can differ.
Figure 4.3. Social needs and investment sectors
Source: OECD based on Social Impact Investment Task Force established by the G8 and GIIN website, http://www.thegiin.org/,
accessed 21 July, 2014.
4.16 Table 4.1 below provides a range of social areas that could potentially be considered SII under
various circumstances. The first three areas include Community, Culture and Arts, which have typically
been covered by philanthropic grants. The last five include Agriculture, Energy/Environment, Financial
Services, Water and Sanitation, and ICT, which can be considered more mainstream investment sectors.
Therefore on both of these ends of the spectrum, inclusion as SII depends on the other characteristics of the
transaction, which will likely vary by subsector or location of provision of the service (described further in
section 4.2.2 below).
4.17 Dementia is an example of a social need in which SII can play an important role — this is clear
from the G8 initiative launched in this area last year by the U.K. Active Minds (UK), which provides
products and activities that help people suffering from dementia, is an example of an organisation into
which investment could clearly be considered. On the other hand, the Big Idea Cooperative (US) is a café
and bookstore that focuses on reaching out to the community and selling books promoting “social,
economic and environmental justice”. It is a certified B-corp, incorporated as a limited liability company
(LCC) and running on a not-for-profit basis. However, while providing books (literature) can be
considered “culture”, it is not clear that this organisation would fit within most SII definitions (including
OECD) as it does not set outcome objectives and measure their achievement.
46 © OECD 2015