Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
8. CONCLUSIONS AND NEXT STEPS
8.1 As social needs continue to grow, social impact investment can open the door to greater
innovation in the way that social issues are tackled and potentially provide new ways to more efficiently
and effectively allocate public and private capital to address social and economic challenges at the global,
national and local levels. While these innovative new approaches will not replace the core role of the
public sector or the need for philanthropy, they can provide models for leveraging existing capital using
market-based approaches with potential to have greater impact.
8.2 Interest and activity in social impact investment continues to develop around the world. There is
a greater recognition of the need for effective solutions to social challenges drawing a growing and broader
range of capital providers. Private sector investors, such as foundations, high net worth individuals and
institutional investors are increasingly interested in making investments that can have both a social and a
financial impact, which has implications for developed and developing countries.
8.3 The social impact investment market is at an important inflection point. Awareness, interest and
activity have increased, in particular due to the international initiative launched under the U.K. G8
Presidency in 2013 and the subsequent work of the Social Impact Investment Taskforce and the National
Advisory Boards. These initiatives are now moving into a new phase which will include expanding to the
G20 countries and beyond.
8.4 This paper has attempted to provide frameworks and approaches for thinking definitions and data
in the social impact investment market, highlighting the implications for policy. The paper seeks to deepen
the discussions about the definitions of social impact investment to enable clearer comparisons within and
across countries.
8.5 The social impact investment ecosystem framework outlined in the paper highlights the
importance of starting with the social needs and beneficiaries, not with the financial instruments being
applied. A mix of financing instruments can then be tailored to those particular needs and beneficiaries. As
discussed in Chapter 5, the context within each county is a critical determinant for the possible
opportunities for social impact investment.
8.6 Given the growing level of activity in the social impact investment market around the world, it is
crucial to build the evidence base to understand what works and ensure that capital is put to work on
interventions that achieve the intended impact. This includes systematically collecting data and being able
to use the data in a cross-country comparable way to better track the development of the market.
8.7 In particular, further work is needed to assess the role of SII in developing countries. This report
has focused on the G7 and Australia. Further work could expand the scope to the G20 countries and
beyond. Changes in the development finance landscape will require new measures to capture the full
spectrum of financial instruments and facilitate the analysis of funding from all sources. The shift in
sources of financial flows will also require further analysis of the trade-offs in terms of various types of
financing, including SII, as well as a scoping in terms of which market settings are more appropriate for
various types of financing. This could build upon current OECD work on financing for development.
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