Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
In addition to objective information on financial performance from expenditures and sales (and other forms of
revenues), the new wave of surveys launched in 2014 also includes a number of questions regarding social
enterprises’ access to finance. As an example, the 2014 SESS for Alberta explicitly asks whether access to loans,
access to grants or cash-flow management were a significant challenge for social enterprises. Together with objective
financial information, survey results can provide a baseline estimate for the scope for SII in each Province.
Source : Elson and Hall (2013); http://www.sess.ca/english/
6.17 In addition, some types of social ventures belong to various associations and networks. This is,
for example, the case of the Cooperative Association in Germany. The existence of such associations can
help with sampling. Moreover, associations of specific types of delivery organisations (e.g. cooperatives)
may also collect data on members. It is often in the interest of associations to disclose some information
about their members for promotion purposes. Some organisations involved in SII activity also maintain
directories of delivery organisations. This is, for example, the case of some NPIs active in SII such as the
Groupe SOS in France, or financial intermediaries that share a list of its portfolio companies (e.g.
Oltreventure; ClearlySo). 25 These associations and networks can be a key interlocutor in future data
collection efforts.
6.18 Analysing the demand side of the SII framework involves a number of challenges. First, it is not
yet clear what type of organisation should be considered within the scope of SII. For example the
discussions are still evolving in terms of what exactly can be considered a social enterprise. Literature
shows that social enterprise definitions have changed across time and geographies (Kerlin, 2010), and is
strongly influenced by differences in social context. As an example, in the analysis of the 2013 Alberta
SESS above, Elson et al. (2013) note that the definition of social enterprises “excludes social purpose
business ventures and other forms of socially responsible business activity by the private sector, as well as
enterprising activities by all orders of government”. Changing definitions over time result in challenges for
data interpretation. Focusing on the social intent of organisations, as described in Section 4, could help in
identifying the demand side of the SII framework. However, collecting data based on social intent would
require an objective and consensual measurement of intent.
6.19 Teasdale et al (2013) show how different criteria to identify social enterprises in the UK, used in
surveys over time, has resulted in biased estimates of the growth of the social enterprise sector
(Figure 6.1). While for example initial surveys such as the ECOTEC, 2003 could understate the full extent
of the social enterprise population (Type I error), the ASBS dataset compiled in 2007 might have included
companies that are beyond the scope of the social enterprise concept (Type II error) — Type I and Type II
errors are discussed at length in Section 6.4. Therefore, any interpretation of the increase from around
5 300 social enterprises in 2003 to around 60 000 in 2007 must take into account changing criteria over
time.
6.20 Second, legal forms do not match what could be understood as an SII investee. Even if they did,
these would not necessarily be comparable across countries. Due to the different systems, taxonomy varies
from country to country. As an example, “solidarity” companies in France are not directly comparable to
social cooperatives in Italy or community interest companies in the UK. In mapping the social enterprise
sector across EU countries, Wilkinson et al. (2014) finds a wide range of legal forms and classifications in
different countries.
25 . Oltreventure’s directory can be found at http://www.oltreventure.com/index.php/investimenti/riepilogo.
ClearlySo provides a directory of social enterprises around the world, available at
http://www.clearlyso.com/directory.html.
84 © OECD 2015