Big Society Capital should be “more open” to learning from charities, according to a report into the social investor’s progress towards its strategic goals.
The report, which draws on interviews with more than 50 people at charities, social enterprises, banks and intermediaries which have worked with BSC, says that BSC’s investments have helped deliver “substantial social impact”.
However, it also identifies “ongoing tensions” between BSC's twin mandates to sustain its own capital and grow the social investment market.
Lack of understanding
Some interviewees told the report authors that while they “admired the skills of BSC people”, they also “recommended greater exposure to, and being more open to learning from, frontline social enterprises/charities, as well as from co-investors and intermediaries”.
In a separate section of the report, the authors say: “There were many anecdotes suggesting lack of understanding among BSC people of the human issues being addressed through social investment, or the eye-opening experiences when some BSC people actively engaged and began to identify with end-users of the investments, or the journey that enabled BSC people to move on from ‘seeing all the problems’ to ‘seeing the opportunities for impact’.”
Some interviewees also criticised what they saw as insensitivity by BSC in its dealings with smaller partners.
The report says: “BSC remains arguably the most influential player and developer of social investment in the UK, even if it is not the largest financially.
“BSC invests through many small and often still thinly-capitalised intermediaries, many of whom are dependent on BSC. The market is far from its desired long-term vision of a mature, deep, broad and competitive marketplace.
“Many interviewees believe that BSC needs to be more sensitive to this imbalance and look to strengthen the market by greater sharing of its knowledge, resource and capital with others, using its influence to support the ideas and activities of others, and to resist imposing their own view of the world.”
The future role of social enterprise
The report praised BSC's work overall since it was founded eight years ago, saying: “The overwhelming majority of interviewees believe that social investment in the UK would not have grown to the same extent without the catalytic impact of BSC’s focus, its funding resources and its highly-skilled people.”
A number of interviewees also said that BSC could have an important role “to explain the positive – and potentially huge – role of social enterprise for the recovery of the UK economy” after Covid-19.
BSC: We will seek more input from people with 'lived experience'
In a published response to the report, Sir Harvey McGrath, chair of BSC, said: “We will seek more input from those with lived experience of the social issues we fund, building on the Young Foundation report on user voice and experience in social investment which we commissioned.
McGrath added: “BSC – and the social impact market we are helping build – are works in progress, so an independent external perspective is enormously valuable to hold us to account, sense check our choices, and help us make course corrections for the future.”