Big Society Capital Inclusion London Event Alastair Ballantyne – June 2013

2000 Social Investment Task Force launched 2006 Government sets up the Office of the Third Sector 2007 Commission on Unclaimed Assets 2013 “Big Society Capital: One Year On” History of Big Society Capital 2008 Dormant Accounts Act 2009 Government Consultation on “Social Investment Bank” 2012 Launch of Big Society Capital by Prime Minister BSC 2012 Highlights: £56.6 million of investment commitments 20 investments detailed in annual report

Big Society Capital – Building the Social Investment Market HSBC Barclays Lloyds TSB RBS Big Society Capital Big Society Capital Dormant Accounts Social Investment Finance Intermediaries Investors seeking to positive social impact and financial return. Social enterprises requiring growth capital. £600m capital Operating Principles IndependentTransparentWholesaleSelf-sufficient

Big Society Capital’s role INVESTOR Grow the social investment intermediary market Provide range of affordable and appropriate finance for frontline social organisations CHAMPION Increase awareness and confidence in social sector and in social investment Work with sector to develop framework for evidencing social outcomes Create investible products for individual and institutional investors Work with UK and EU governments to encourage appropriate policy and tax support for social investment

Big Society Capital Commitments - 4 broad types Operating intermediaries– provide support to social sector organisations General funds – increase supply of capital available to social ventures Specialised funds – invest with themes such as sectors or regions Social Impact Bonds – provide upfront capital for social ventures delivering services under Payment by Results contracts Nesta Impact Investment Fund PURE Community Energy Fund Essex SIB Social Stock Exchange Social Stock Exchange Invests in social enterprises that use technology and innovation to solve social issues. Provides finance for community renewable energy projects. Nesta PURE Supports intervention programmes for year olds at the edge of entering care or custody so that they can safely remain at home with their families. Social Finance Connects socially motivated investors with social purpose businesses that need capital. Social Stock Exchange E.g. SIFI Approach

What is an Intermediary? Investor Intermediary Frontline Investor Frontline Who are intermediaries? Sector Bank Specialist Fund Social Impact Bond Market infrastructure What does an intermediary do? Select investments Monitor social & financial results Diversify risk Raise capital for future investments

Social Investment Finance Intermediaries Social Funds Social Enterprise funds Specialised funds Social Lenders Social Impact Bonds Investment Readiness Bridges SIB Fund Social Investment Market CIC Social Incubator Fund

Big Society Capital – How We Invest Market development contribution Strong We analyse our investments based on three criteria: Social Impact Performance Financial Performance Strong Weak

Big Society Capital – Evidencing Social Value Social Mission: what is the promise of change? – vision and understanding of issues Governance: legal structure, mission locks, board, exit Activities: track record, management, financial/social impact alignment Impact: depth and breadth of impact, innovation, frontline delivery Impact Assessment and Measurement: assessment and screening, planning and targeting, monitoring and reporting, auditing

Social Organisations seeking Social Investment Define Revenue Model Trading business Willing commissioners Buying an asset Funding Advice Social Investment Funds Social Outcomes Funds Developing a Business Plan and Evidence Base Venture philanthropy Government grants Non-government grants

Forecast growth in Social Investment supply and demand (£m) Source: The Boston Consulting Group - Unsecured lending - Quasi equity - Outcomes based financing

Are you thinking about Social Investment? Social Sector Organisation Directory of Intermediaries Social Finance Intermediary Online Expression of Interest