I dream that everyone can have the opportunity to become a social investor. Whether its £5 or £5,000, I want to people to be able to invest whatever they can afford by the touch of a button on their phone. Not donate money, but invest it. Get some, most, all of it back, plus interest, if appropriate.
What's stopping this?
Certainly not technology. Certainly not the need for small scale high risk seed investment. Neither is it a dearth of socially minded entrepreneurs.
But if I stop 100 non-Guardian readers (no offence) in the street, how many will know about ethical or responsible investment, let alone social investment.
Thankfully last week's National Ethical Investment Week highlighted how far ethical investment has developed in recent years. Some of the announcements made and research published during the week will work well in terms of raising the profile of this market and increasing awareness.
But once we raise the awareness, where's the mass retail product, outside of negatively screened funds, ethical savings accounts and clean tech? Unless the machinery of "mainstream" capital lurches into action, is this sector ever really going to grow remotely near the speed to keep up with the social need? We are struggling to keep pace even before the brakes of government funding and precarious economic conditions really start to bite.
However, in the past few weeks, I've seen things that confirm my belief that it is now only a matter of time when, no longer if, my dream of retail social investment becomes a reality.
In an indirect way, we are all becoming social investors. National Lottery players have just created the £2.2m fund to back UnLtd's Big Venture Challenge – a ground breaking co-investment fund into social ventures. The wider UK taxpayer has got in on the act last week, admittedly unknowing, via the launch of the RBS Community Business Loan Fund. This £5million business loan fund for civil society organisations unable to access mainstream lending from banks was a welcome additional source of loan finance for the sector. Sir Ronald Cohen gave a pretty robust challenge at the previous week's British Venture Capital Association conference to get involved. All we need now is the regulators to tweak the Financial Promotions Act to recognise socially minded investment.
Do we at The Social Investment Business see new capital providers coming into the market as a threat? Hell, no. We know that there is a lot of demand for this kind of finance, and that if there are only a handful of social investors a lot of viable organisations will still miss out, so it is good to see more investors entering the market.
We see our role as a key partner and collaborator with all other social investors – both old and new – to contribute to the learning and evidence base that will provide a foundation for more entrants, more investments and therefore more social good.
This is why in the new round of Communitybuilders funding which opened last week, we have set out to work with co-funders to support community anchors and will act as both the first and last brick in a funding package. In the past we've entered into co-funding deals for individual projects with Charity Bank, Triodos Bank and the Big Lottery Fund to name but a few and it is something we aim to do more of in the future. We find that this type of funding package better allows civil society organisations to build an investment package that suits their business. If we're going to bring more money into the social investment market, this kind of co-funding could become standard practice amongst social investors in the future.
New institutional and commercial investors should ultimately lead to retail products, and as Penny Shepherd wrote in the Financial Times the demand is there - according to new research from YouGov, a quarter of British adults with investments want more information on responsible ownership practices. There is a massive opportunity for the social investment sector to capitalise on this interest.
We need to be sharing information about the great work civil society organisations are doing; more needs to be done in promoting the value of individual ethical and social investment and the number and quality of the organisations that are creating social good.
The end goal for ethical and social investment alike must surely be that we make it as easy as possible for individuals and institutions to invest their money in viable and sustainable social businesses and entrepreneurs. This will not only allow individuals to benefit from the services their local charity or social business provide and volunteer their time to support them but also to invest their money in them.
That would be a socially powerful connected society. And a dream worth chasing.
Jonathan Jenkins is the Chief Executive of The Social Investment Business
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