Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
7.9 While there have been an increasing set of policy actions in the social impact investment market,
to date, there have only been a few evaluations, including the ICRF evaluation referenced in Chapter 3 and
the SIB evaluation described later in this chapter. This is also due to the fact that many of these policy
actions are relatively new. The Social Impact Investment Taskforce and the NABs have helped to highlight
the set of existing policy actions which has facilitated discussions about how these and other policies are
working.
7.10 There are also several policy instruments that, while affecting SII, do not necessarily target the
SII ecosystem (e.g. seed funds; regulations on institutional investors’ asset allocation and risk). When
devising broader policy instruments, it is important that governments take into consideration potential
favouring or hindering effects upon the SII market and balance them against expected outcomes in other
areas of the economy.
7.11 Patience and long-term support is needed to develop a market. Creating and investing in new
innovative social ventures and building supporting ecosystem takes time and results might only be seen
after 10 years or more (HM Government, 2013c). Policy is long-term but politics can be short-term so
there is a danger that the increased level of government interest and involvement in this topic might decline
in the shorter term if the necessary results are not forthcoming.
7.12 Given the plethora of recent reports outlining a broad set of policy recommendations (SIITF,
Working Groups, NABs, IIPC, etc.), the recommendations below address how to build the evidence base,
which is the overall focus of this report.
7.3. Recommended policy actions for building the evidence base
7.13 As social challenges mount and existing approaches are unable to keep up amidst continued
pressure on government budgets, social impact investment provides an opportunity to develop new
approaches to address social and economic challenges. However, given that SII is a nascent field, concrete
evidence is needed in terms of its impact to date. In particular, further work is needed to demonstrate the
gains from the SII approach, compared to existing social service delivery models. Therefore our
recommendations focus on building the evidence base, including developing a common agreement on
definitions, committing to building the necessary infrastructure for coordinated data collection processes,
furthering efforts on the measurement of social outcomes and evaluation of policy.
7.14 Given that additional, and more effective, funding is needed to address the increasing social
challenges facing society, governments in a number of countries are demonstrating interest in exploring the
opportunities that SII could also provide in terms of improved social service delivery. In fact, as described
in Section 7.2, some countries have already set up policies to facilitate the development of SII markets. As
there is limited evidence to date in terms of what works and what doesn’t, this section outlines some
recommendations in terms of building the evidence base and suggestions regarding key points for policy
makers to keep in mind, particularly in terms of outcome measures and evaluation of policies. Further
analysis is needed in terms of specific approaches to SII, looking at a variety of instruments and sectorspecific
developments. This would help develop a better understanding of which approaches seem to be
working and help build and share experiences which could later lead to the scaling up of successful cases.
7.3.1 Developing common definitions
7.15 A stronger evidence base, both in terms of the level of market activity as well as the impact of
SII, is critical to increasing engagement in the market and encouraging a global market to develop (HM
Government, 2013c). This includes a better and more accurate understanding of the size, scope and
114 © OECD 2015