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53-692: Social impact investment is about lending or investing money to achieve a social, as well as, financial return. BSC was the world's first social investment institution of its kind, conceived under Gordon Brown's Labour government, then established in April 2012 by the Cabinet Office of the Cameron-Clegg ministry . It launched as an independent organisation with a £600m investment fund. The investment fund comes from dormant bank accounts via an independent Reclaim Fund and four leading UK high street banks. The institution

106-722: A Big Society Bank to help finance social enterprises, charities and volunteering groups through intermediaries… using every penny of dormant bank and building society account money allocated to England." In 2011, the Merlin Agreement between the Government and the major UK high street banks included a commitment for the four largest banks to put £200 million into setting up the Big Society Bank. After consulting with key social sector organisations, Ronald Cohen (BCS's founder chair) and Nick O’Donohoe (BSC's CEO from 2011 to 2015) offered

159-566: A book of the same name, which furthered thinking about the non-financial effects of corporate production. The term "impact investing" was coined in 2005 by Mark Zapletal of Wartenberg Trust in his presentation "Impact Investing, a Door to Sustainable Philanthropy", at the Global Family Office Summit in New York . A commitment to measuring social and environmental performance, with the same rigor as that applied to financial performance,

212-817: A four-part ethical framework to endowment investments conceptualized as Human Capital, Natural Capital, Civic Capital, and Financial Capital. Foundations that make investments aligned with related philanthropic work include the Bill & Melinda Gates Foundation , Soros Economic Development Fund , and Ford Foundation . Program-related investments (PRIs) are investments, usually by foundations, into below-market rate or concessionary investments that are primarily made to achieve charitable or "programmatic" objectives rather than financial objectives. This category includes recoverable grants, below-market-rate loans, R&D or seed stage equity investments (stock), loan guarantees and volume guarantees. For private foundations, PRIs count towards

265-432: A growing interest in impact investing from faith-based investors, as they seek to align their investments with their core beliefs. Governments and national and international public institutions including development finance institutions have sought to leverage their impact-oriented policies by encouraging pension funds and other large asset owners to co-invest with them in impact-informed assets and projects, notably in

318-462: A leading role in the development of impact investing. Under Pope Francis , the Catholic Church has seen an increased interest in impact investing. Impact investing occurs across asset classes ; for example, private equity / venture capital , debt, and fixed income. Impact investments can be made in either emerging or developed markets, and depending on the goals of the investors, can "target

371-442: A portion of their portfolio to investments that deliver financial as well as social or environmental benefits. Impact investing is distinguished from crowdfunding sites, such as Indiegogo or Kickstarter , because impact investments are typically debt or equity investments over US$ 1,000—with longer-than-traditional venture capital payment times—and an "exit strategy" (traditionally an initial public offering (IPO) or buyout in

424-505: A portion or with the entirety of their endowment . They include any type of investment that is intended and designed to generate both a measurable social or environmental benefit and a financial return. For example, after the Heron Foundation 's internal audit of its investments in 2011 uncovered an investment in a private prison that was directly contrary to the foundation's mission, the foundation developed and then began to advocate for

477-401: A range of returns from below-market to above-market rates". Historically, regulation—and to a lesser extent, philanthropy —was an attempt to minimize the negative social consequences ( unintended consequences , externalities ) of business activities. However, a history of individual investors using socially responsible investing to express their values exists, and such investing behavior

530-458: A social investment fund. On 31 March 2010, David Cameron announced that a Conservative government would set up a "Big Society Bank" funded by unclaimed bank assets as part of a Big Society initiative. A Conservative policy document said the proposed Big Society Bank would not be restricted to lending but would also invest in innovative products such as social impact bonds . In July the same year, as Prime Minister, Cameron said: "We will create

583-543: A total of £925   million by reinvesting returns from initiatives backed by its original endowment, and had attracted nearly £3   billion in co-invested private capital. Banks and building societies in the UK pay money from dormant accounts to Reclaim Fund Limited. This body keeps sufficient funds to meet reclaims from account holders, and passes surplus funds to the National Lottery Community Fund (formerly

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636-567: Is a ministerial department of the Government of the United Kingdom . It is responsible for supporting the prime minister and Cabinet . It is composed of various units that support Cabinet committees and coordinate the delivery of government objectives via other departments. As of December 2021, it had over 10,200 staff, mostly civil servants , some of whom work in Whitehall . Staff working in

689-508: Is a UK-based specialist in environmental impact investing, Sarasin and Partners, which has a history of pressing investee companies on sustainability issues, and Triodos Investment Management , which is a Netherlands -based manager which focuses on sustainability issues. India is emerging as a major geography for impact investors according to consulting firm, McKinsey, with over $ 1.1 billion already invested as of 2016. Impact investments occur across asset classes and investment amounts. Among

742-564: Is a critical component of impact investing. The number of funds engaged in impact investing grew quickly over a five-year period, and a 2009 report from research firm the Monitor Group estimated that the impact investing industry could grow from around US$ 50 billion in assets to $ 500 billion in assets within the subsequent decade. Such capital may be deployed using a range of investment instruments, including equity, debt, real assets, loan guarantees, and others. The growth of impact investing

795-533: Is a subsection of Impact Investing, and refers to investments which are "made into companies, organizations, and funds with the explicit intent to create a positive impact on gender". Investments which promote gender equity and address gender based issues can be made by investing in gender led enterprises, enterprises which promote gender equality through hiring, women in positions of authority, or in their supply chain, as well as supporting services which support, empower and develop capacity of women. Gender lens investing

848-440: Is far from certain that a giant oak will grow. But there are some very exciting ideas ...which could help society and government tackle issues that have always struggled to obtain funding in the past" Management Today said that "There's nothing wrong with the idea, or the model, or even the pot. But this plan still seems to lack some hard-headed commercial nous ". A heavier involvement with front line social sector organisations

901-405: Is partly attributed to the criticism of traditional forms of philanthropy and international development , which have been characterized as unsustainable and driven by the goals—or whims—of the corresponding donors. As of 2015, impact investing was still only a small market when compared to the global equity market, estimated at US$ 61 trillion (market capitalization of domestic listed companies) by

954-423: Is something that others agree Better Society Capital needs to focus on. Others are equally worried about the direction of the social investment market overall, as they say that a lot of the noise around social investment has been from the perspective of investors rather than front line social organisations. Others point out that social finance will never be applicable to all of the social sector and Big Society Capital

1007-487: Is to ensure that Better Society Capital fulfills its mission. The Oversight Trust is the majority shareholder in Better Society Capital, controlling 80% of the voting rights at shareholders' meetings. Its role is to ensure that Better Society Capital remains true to its mission. For important issues such as a change to the company's objects or removal of a Big Society Capital director, the consent of at least 75% of

1060-475: Is usually defined by the avoidance of investments in specific companies or activities with negative effects. Simultaneously, approaches such as pollution prevention , corporate social responsibility , and triple bottom line began as measurements of non-financial effects, both inside and outside of corporations. In 2000, Baruch Lev of the NYU 's Stern School of Business collated thinking about intangible assets in

1113-580: The Commission on Unclaimed Assets , was set up to consider how money left unclaimed in dormant bank accounts for over 15 years could be used to benefit society. In a consultation paper published in July 2006, the Government recommended the establishment of a Social Investment Wholesale Bank . In March 2007 the Commission published its report "Social Investment Bank – its organisation and role in driving development of

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1166-525: The Department for Culture, Media and Sport launched a consultation on how to allocate a further £880m of dormant assets and in March 2023 it was announced that social investment would remain one of the causes to receive further dormant asset funding. Better Society Capital's mission is to grow the amount of money invested in tackling social issues and inequalities in the UK. It aims to make a transformative impact on

1219-909: The Global South . World Pensions Council and other US and European experts have welcome this course of action, insisting nonetheless that: Governments and international institutions need to do more if they truly seek to 'unlock' private sector capital in a meaningful way. They have to ask themselves the following questions: what are the concrete legal, regulatory, financial and fiduciary concerns facing pension fund board members ? How can we improve emerging industry standards for impact measurement and help pension trustees steer more long-term capital towards valuable economic endeavors at home and abroad, while, simultaneously, ensuring fair risk-adjusted returns for future pensioners? Mission investments are investments made by foundations and other mission-based organizations to further their philanthropic goals, either with

1272-518: The Marie Curie Cancer Care charity said: "it is potentially setting up a system to encourage vulnerable charities to borrow money." In January 2011 Banco Santander , who have major retail banking interests in the UK, withdrew from Project Merlin negotiations with the Government and is expected not to make any direct payments to the BSB. The FT suggested that it was "a tiny acorn from which it

1325-658: The Prime Minister's Office are part of the Cabinet Office. The Cabinet Office's core functions are: The Cabinet Office has responsibility for the following at the UK national level: The department was formed in December 1916 from the secretariat of the Committee of Imperial Defence under Sir Maurice Hankey , the first Cabinet Secretary . Traditionally the most important part of

1378-1039: The Telegraph reported on the founders of Witchsy who created an imaginary third male founder in order to converse with male investors. Gender lens investing is growing rapidly. More than 100 funds are open to private investors. In 2018 the number of gender lens assets under management grow by 40% according to analysis by Veris Wealth Partners. Demand is rising with major banks offering gender lens bonds including NAG, Goldman Sachs, Merrill Lynch and many others. Cabinet Office King Charles III [REDACTED] William, Prince of Wales [REDACTED] Charles III ( King-in-Council ) [REDACTED] Starmer ministry ( L ) Keir Starmer ( L ) Angela Rayner ( L ) ( King-in-Parliament ) [REDACTED] Charles III [REDACTED] [REDACTED] [REDACTED] The Lord Reed The Lord Hodge Andrew Bailey Monetary Policy Committee The Cabinet Office

1431-646: The Big Lottery Fund). The latter releases the English portion of these funds to the Oversight Trust to invest in Better Society Capital. When BSC was launched in 2012, £425   million was available from dormant accounts, alongside £200   million from four of the main UK banks; Barclays , HSBC , Lloyds Banking Group and The Royal Bank of Scotland (later NatWest ) each invested £50   million in BSC. In 2022,

1484-470: The Cabinet Office often takes on responsibility for areas of policy which are the priority of the Government of the time. The units that administer these areas migrate in and out of the Cabinet Office as government priorities (and governments) change. The Cabinet Office Ministers are as follows, with cabinet ministers in bold: Additionally supports the Deputy Prime Minister on: Driving delivery of

1537-625: The Cabinet Office's role was facilitating collective decision-making by the Cabinet, through running and supporting Cabinet-level committees. This is still its principal role, but since the absorption of some of the functions of the Civil Service Department in 1981 the Cabinet Office has also helped to ensure that a wide range of Ministerial priorities are taken forward across Whitehall. It also contains miscellaneous units that do not sit well in other departments. For example: In modern times

1590-609: The Government an outline proposal for the Big Society Bank. Caroline Mason was BSC's chief operating officer until 2013. The proposal was accepted by the Cabinet Office subject to certain conditions, including regulatory approvals from both the EU Commission and the Financial Services Authority . An interim "Big Society Investment Fund" was set up under the auspices of the Big Lottery Fund to make investments before

1643-531: The Oversight Trust board is required. Big Society Capital reports regularly to the Oversight Trust on its financial performance, its investments and board and senior manager appointments. The Better Society Capital CEO is invited to attend The Oversight Trust board meetings as an observer. Barclays , HSBC , Lloyds Banking Group and RBS are shareholder banks. Each shareholder bank has committed to subscribe to £50 million of Better Society Capital's shares; their individual shareholding will always be less than 10% of

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1696-541: The SPDR Gender Diversity ETF from State Street are publicly traded and hence available to anyone with a stock brokerage account. MSCI offers 11 environmental, social and governance index ETFs, including popular low-carbon and sustainability indexes. Groups of angel investors focused on impact, where individuals invest as a syndicate also exist. Examples include Investors' Circle in the US, Clearly Social Angels in

1749-642: The Treasury Buildings. Immediately to the west Dorset House (1700) connects the front of the building to William Kent 's Treasury (1733–36), which faces out onto Horse Guards Parade . The latter is built over the site of the Cockpit, used for cock fighting in the Tudor period, and subsequently as a theatre . In the early 1960s the buildings were restored and many of the Tudor remains were exposed and repaired. Significant renovations between 2010 and 2016 converted many of

1802-492: The United Kingdom and the global investor network Toniic. Web-based investing platforms, which offer lower-cost investing services, also exist. As equity deals can be prohibitively expensive for small-scale transactions, microfinance loans, rather than equity investment, are prevalent in these platforms. MyC4 , founded in 2006, allowed retail investors to loan to small businesses in African countries via local intermediaries, though

1855-667: The World Bank. Impact investors managed US$ 114 billion in impact investing assets, a figure that serves as a best-available "floor" for the size of the impact investing market, according to GIIN's 2017 Annual Impact Investor Survey . The largest sectors by asset allocation were microfinance, energy, housing, and financial services. Many development finance institutions , such as the British Commonwealth Development Corporation or Norwegian Norfund , can also be considered impact investors, because they allocate

1908-614: The banks have the right to request a meeting with the senior management of Better Society Capital to discuss its performance. The investments made by Better Society Capital fall into these broad categories: Better Society Capital was set up to receive equity capital from dormant bank accounts of up to £400m and £200m from the shareholder banks (Barclays, HSBC, Lloyds Banking Group and RBS). During: Better Society Capital has made allocations to charities and social enterprises. Impact investment Impact investing refers to investments "made into companies, organizations, and funds with

1961-1524: The best-known mechanism is private equity or venture capital. " Social venture capital ", or "patient capital", impact investments are structured similarly to those in the rest of the venture capital community. Investors may take an active role mentoring or leading the growth of the company, similar to the way a venture capital firm assists in the growth of an early-stage company. Hedge funds and private equity funds may also pursue impact investing strategies. Impact investment "accelerators" also exist for seed- and growth-stage social enterprises. Similar to seed-stage accelerators for traditional startups, impact investment accelerators provide smaller amounts of capital than Series A financings or larger impact investment deals. Most "impact investment accelerators" are nonprofits, raising grants from donors to pay for business development services; however, commercially orientated accelerators providing investment readiness and capital-raising advisory services are emerging. Large corporations are also emerging as powerful mechanisms for impact investing. Companies that seek to create shared value through developing new products/services, or positively impacting their operations, are beginning to employ impact investments through their value chain, particularly their supply chain. Impact investing can help organizations become self-sufficient by enabling them to carry out their projects and initiatives without having to rely heavily on donations and state subsidies. There has been

2014-603: The for-profit startup sector) may be non-existent. Although some social enterprises are nonprofits, impact investing typically involves for-profit, social- or environmental-mission-driven businesses. Organizations receiving impact investment capital may be set up legally as a for-profit, not-for profit, Benefit corporation , Low-profit limited liability company (L3C), Community interest company , or other designations that may vary by country. In much of Europe, these are known as " social enterprises ". The main activists in this market have been Impax Asset Management Group , which

2067-556: The government's priorities; Civil contingencies and resilience. Leaders of the Houses of Commons and Lords supported by the Cabinet Office are as follows: The Cabinet Office senior civil servants are as follows: The Cabinet Office also supports the work of the Whips Offices of the House of Lords and House of Commons. The Parliamentary Private Secretary to the Cabinet Office supports

2120-637: The intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is about an alignment of an investor's beliefs and values with the allocation of capital to address social and/or environmental issues. Impact investors actively seek to place capital in businesses, nonprofits , and funds in industries such as renewable energy , housing, healthcare, education, microfinance , and sustainable agriculture . Institutional investors, notably North American and European development finance institutions , pension funds and endowments have played

2173-579: The investment decision-making and portfolio management processes. In 2000, Labour Chancellor Gordon Brown set up the Social Investment Task Force (SITF) to look at ways to create wealth and promote enterprise to support economic regeneration and community cohesion. The first report of the SITF highlighted the need for "wholesale intermediaries" to provide new sources of capital to help the community finance sector grow. In 2005, an independent body,

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2226-677: The new institution was launched. In April 2012, Big Society Capital was launched by the Prime Minister at an event hosted by the London Stock Exchange . In April 2024, the organisation was renamed to Better Society Capital to more accurately articulate its mission. The principle of BSC has met with criticism from diverse groups including banks and charities. Giving evidence to the Public Administration Select Committee , Thomas Hughes-Hallett, chief executive of

2279-517: The outstanding paid-in capital. The banks can vote at shareholders' meetings. Their votes are in proportion to their shareholding, but each is capped at 5% of the overall voting rights. The banks are represented on the Better Society Capital board by a bank-nominated director. In addition to information provided to them by the BSC Director, the banks receive all Big Society Capital board papers and quarterly and half yearly reports. In certain circumstances

2332-1054: The required 5 percent annual payout. Mission-related investments (MRIs) are investments, generally made from endowments, into mission-driven organizations that are expected to generate market-rate financial returns comparable to an ordinary investment of a similar type and risk profile. MRIs are designed to have both a positive social impact and contribute to the endowment's long-term financial stability and growth. Examples of MRIs include loans to mission-aligned non-profit organizations (e.g., charter schools, hospitals or research centers) that are expected to pay back loans with interest, as well as investments in for-profit social impact companies, social impact funds, socially responsible fixed income (bond) funds, impact-oriented private equity funds and public equity portfolios (stocks). Impact investing historically took place through mechanisms aimed at institutional investors. However, there are ways for individuals to participate in providing early stage or growth funding to such ventures. Exchange-traded funds like

2385-513: The service permanently closed in 2019. Microplace was an early United States provider of such services which ceased taking on new loans in 2014, stating that its results "haven't scaled to the widespread social impact we aspire to achieve". Impact Investing in Asia is a burgeoning sector with many funds currently in play. In South East Asia, from 2007 to 2017, US$ 904 million impact capital was deployed by Private Impact Investors (PIIs) and US$ 11.9 million

2438-440: The social investment market by supporting intermediaries to be financially robust and effectively channel capital to the social sector. More widely, it aims to increase awareness of, and confidence in, social investment by promoting best practice and sharing information; improving links between the social investment and mainstream financial markets; and working with other investors to embed social impact measurement and management into

2491-821: The third sector", which provided a blueprint for the institution's funding, goals and governance. The commission's final report concluded that: 'the third sector urgently needs greater investment and professional support and suitable capital should be available for organisations at all stages of development.' In 2008, the UK Government introduced legislation to enable unclaimed money in dormant bank accounts to be used for youth facilities, financial inclusion and social investment. The Dormant Bank and Building Society Accounts Act 2008 passed with cross-party support. It stated that money from dormant accounts available for spending in England could be used for three specified purposes, one of which

2544-526: The work of ministers. Cabinet committees have two key purposes: The main building of the Cabinet Office is at 70 Whitehall , adjacent to Downing Street . The building connects three historically distinct properties, as well as the remains of Henry VIII 's 1530 tennis courts , part of the Palace of Whitehall , which can be seen within the building. The Whitehall frontage was designed by Sir John Soane and completed by Sir Charles Barry between 1845 and 1847 as

2597-524: Was created in response to the difficulty which woman face in accessing capital, as women globally have less access and higher barriers to obtaining capital. Female entrepreneurs have routinely struggled to attract capital from male investors. In 2019 Fortune magazine reported that just 2.2% of all venture capital went to female founders. Taken together, all female founders raised less in capital than one e-cigarette manufacturer. Some have gone to great lengths to avoid experiencing gender discrimination. In 2017

2650-526: Was creating a 'Social Investment Wholesaler'. In July 2009, Office of the Third Sector in the Cabinet Office consulted on the functions and design of this organisation. The idea of a Social Investment Wholesale Bank generated significant interest from across the political spectrum. In March 2010, the Labour Government's Budget announced up to £75 million from the dormant accounts would be committed to

2703-530: Was deployed by Development Finance Institutions (DFIs). Impact investing organizations and funds also make equity investments like traditional private equity and venture capital funds, but only investments with developmental impact. According to a 2021 study by the Wharton School of the University of Pennsylvania venture capital has been dominating the impact investment space. Gender lens investing

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2756-502: Was established to make loans and not grants, a type of finance that will not necessarily be suitable for all. Better Society Capital is an independent financial institution authorised by the Financial Conduct Authority . Independence is ensured by a structure which involves The Oversight Trust on whose board one Government representative serves. Big Society Capital is accountable to The Oversight Trust whose responsibility it

2809-689: Was set up as part of the Dormant Bank and Building Society Accounts Act 2008 , which defined BSC as an organization that exists "to enable other bodies to give financial or other support to third sector organisations". A third sector or a social sector organisation is "a body that exists to assist wholly or mainly for society or the environment". Better Society Capital is a "social investment wholesaler". This means that BSC does not directly invest in frontline organisations, but in intermediaries such as banks and fund managers which provide finance and support to social sector organisations. By 2024, BSC had invested

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