Some interesting snippets of advice from the Guardian while an academic questions the SIB ethos, clearly not being sufficiently financially literate to grasp that government is effectively bankrupt in the west and that giddy social spending of the post WWII years simply cannot be sustained, therefore a new model of efficiency without the clunking fist of the state is required – private initiatives and private capital.
Happy Reading and Have a Great Weekend!
Social investment can help charities and social enterprises overcome the challenges posed by the economic environment. These include strained public sector funding, the increasing demand for their services and a lack of access to traditional commercial finance models. However, owing to the individual circumstances of financial investment, it can be difficult for charities to know if social investment is right for them.
In our Q&A, the expert panel discussed the how, what, where and why of social investment. Here, we round up the best of their advice for your easy perusal.
Edward Siegel – director of investments, Big Issue Invest
Geetha Rabindrakumar – social sector leader, Big Society Capital
Alex Jarman – investor relations, social bonds, Investing for Good
Catherine Rustomji – director and charity law specialist, DWF
Seva Phillips – investment analyst, Charities Aid Foundation Venturesome
Garry Brown – senior client officer, The Key Fund
Neil Poynton – senior client relations manager, Charities Aid Foundation
Not long ago, New York City and Goldman Sachs began to experiment with a new financial instrument—social-impact bonds—to provide private capital to finance a nonprofit program that might otherwise have been passed over for municipal aid.
Now Goldman Sachs has started a $250-million fund to expand on the idea of social-impact investments, and Morgan Stanley hopes to attract $10-billion to a similar effort.
Such serious money flowing into programs that provide essential services has attracted much excitement as deficit-strapped governments, overstretched charities, and foundations that are worried about cash flow see a potential new source of program dollars.
But shouldn’t we be concerned about the implications of this idea—especially one so untested? Do we want to see services funded only when they can make money or also when they can save people and serve communities but not generate surplus dollars? Do we want to see private profit replace public and philanthropic responsibility?
In recent years, ideas for steering private capital to nonprofits have been growing in number and creativity.