Big Society Capital chief executive says sector must co-ordinate on impact

26 Jan 2012 News

Nick O’Donohoe, chief executive of Big Society Capital, has said there needs to be better co-ordination between charities and social enterprises around impact measurement.

Nick O'Donohoe, chief executive of Big Society Capital

Nick O’Donohoe, chief executive of Big Society Capital, has said there needs to be better co-ordination between charities and social enterprises around impact measurement.

O’Donohoe was speaking at a roundtable event organised by New Philanthropy Capital (NPC) entitled Social investment: a revolution in financing or a bubble about to burst?, where he said the sector needed to get better at coalescing around broad principles of impact measurement, even working with the United States.

Iona Joy, head of charity effectiveness at NPC, who also spoke at the event, suggested efforts within the sector to develop shared measurement approaches that would produce comparable data would contribute to addressing this challenge. She questioned whether it might be possible to create a universal metric in such “an enormous and varied market”.

“We could segment markets by area of work and investment type, to come up with practical solutions to measurement,” she added.

Social investment needs fundraisers

Speaking on whether social investment could be a bubble, O’Donohoe said it was too early to judge, but he was optimistic that pieces were in place for a revolution.

“Internationally over the last five years governments in the EU and US have invested around $5bn in social investment according to research from JP Morgan,” he said. “There is a lot of energy and passion.”

But he added that change to the “plumbing”, or the systems in the UK around regulation and tax, was critical:

“Before we’ve had a binary system by types, such as not-for-profit, or for-profit. Social investment will change this.”

O’Donohoe also said that people needed to understand that social investment products need to provide a social, as well as a financial return, which gives an investor back at least their capital, and the prospect of a return over and above the original outlay.

And, he said more focus was needed on capital-raising in the social investment market through “salesmen”, in the same way that charities have fundraisers, as well as clarity on definitions around terms such as 'social venture' and 'social enterprise', to understand which organisations should be included in these definitions and which should not.