Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
4.2.4. Delivery organisation intent
4.33 The intent of delivery organisations can be an important characteristic in defining SII even
though it is not straightforward to operationalise due to the subjective nature of the implicit attributes. A
possible approach is to build on verifiable demonstrations of social intent. The intent of delivery
organisations, as well as investors (discussed in a following section) is subjective and challenging to
capture.
4.34 Social intent can vary from an incidental outcome (i.e. whereby a social outcome is attained
despite the fact that there was no intent beforehand) to a legally binding objective (Table 4.5 below). While
difficult to identify precisely, the intermediate levels in this case might be disentangled, in particular by
looking at the organisation’s mission and vision. Having the intention to address social challenges might
not be sufficient for a social venture to be considered to be eligible for SII. For the purposes of the OECD
definition, merely having the intent stated on the mission is not enough to be considered SII as the delivery
organisation must put sufficient effort into demonstrating that they are committed to the social cause. 12
Table 4.5. List of attributes for Delivery Organisation Intent
CHARACTERISTICS Attributes of the Characteristic Eligibility *
4. Delivery organisation intent
Incidental Social outcome
Social Mission Intent
Compulsory reporting
(Seeks and obtains) External Certification or Label
Legally binding constraints
OUT
OUT
IN
IN
IN
* Eligibility used in the OECD definition for the purpose of this report.
Source: OECD.
4.35 A strong level of commitment can be demonstrated through some form of compulsory reporting
of social outcomes to shareholders within the organisation’s statutes. Within the work of the SIITF, the
Mission Alignment Working Group has identified different degrees of impact intent: i) simply comply with
minimum legal requirements to create impact; ii) intention to create impact and iii) a primary commitment
to create impact (WGMA, 2014). Only the latter is considered to be within the scope of SII (social
enterprises and “profit with purpose businesses”).
4.36 A number of initiatives have focused on developing metrics for impact assessment as well as
assigning labels to companies (see Chapter 6). These help to identify companies within the scope of SII
because they provide a good indication of commitment to social issues. However, while not all SII-related
companies will be certified as so, some certified companies may not fully correspond to a certain definition
of SII. For example, B-Corp certifies companies based on a number of variables, some of which may be
considered to go beyond SII, under a narrower SII definition.
4.37 Legally binding constraints provide the strongest indication of commitment to social goals. The
Financing Agency for Social Entrepreneurship (FASE) in Germany helps social entrepreneurs raise money
and, in the financing contracts managed by FASE, clauses are included in order to prevent social mission
drift (WGMA, 2014).
12 . Please note that the combination of social intent expressed in the mission combined with, for example, a
formal measurement and valuation of social impact should be duly considered
© OECD 2015 51