Future Needs Working Group
Overview
The SIF ‘Future Needs’ working group exists to develop the collective understanding of the current and future needs of social investment market, incorporating all elements of structuring capital. This group would lead on two distinct strands of work:
Product needs: Examining the needs of the sector, connecting with the data, and interpreting what is required in the market. This will focus on assessing the needs beyond demand – to understand the flow from need to demand via a supply chain – and evaluating the characteristics and features of social investment products that are be most appropriate for the social economy. This could take the form of a piece of quantitative research about the amount of capital sought, for what purposes, what instruments they do/don’t understand and whether any products are inaccessible.
Wholesale supply: what structure of finance is required to meet the product needs. Making the case for SIFIs to have access to appropriately patient and flexible capital in order to deliver the financial products that are most appropriate for charities and social enterprises.
This will aim to complement other ongoing work in the sector, including the Access Flexible Finance programme and the SEUK Commission on Social Investment. The SIF membership will be consulted on the scope and direction of this research – with the aim of engaging a wider group to set the final terms of reference.
Terms of Reference
Product needs:
What parts of the social investment market currently underserved?
Are there financial instruments that are not being utilised effectively?
What are the main barriers to VCSEs accessing appropriate finance?
Has the Covid-19 pandemic changed the level and type of demand, and how should social investors respond to this?
Is there a disconnect between what is available and what is needed? What is the interaction between product needs, wholesale supply and demand?
Are there quasi-equity or equity-like instruments that need further development?
Wholesale supply:
Given the market needs, what structure of finance is needed for the social investment to work most effectively?
Are there sources of capital that have not yet been mobilised for social investment?
How could the next phase of dormant assets money be used to further strengthen and develop the social investment market?
Are there forms of subsidy that are being underutilised – tax incentives, guarantees, blend or something else – and who is responsible for providing this subsidy?
Where does social investment fit within the wider levelling up agenda, and how to communicate this most effectively to external stakeholders?
Phase 1: Future Needs Survey (currently seeking responses)
The recent report from the Adebowale Commission called for comprehensive reform to the social investment market, highlighting a gap in the marketplace for ‘enterprise-centric finance’ that is patient, flexible and less focused on debt.
In response, the Social Investment Forum is undertaking a piece of research under its Future Needs working group that aims to move beyond asking what form of money people want (loan, grant, blended, equity etc), and focus instead on assessing the product features that are most appropriate and desirable for charities and social enterprises when they are looking to take on investment.
This survey will develop our sector’s understanding of the current and future needs of the social economy – incorporating all elements of product design and development – to help ensure that we can offer social investment products which are built around the needs of charities and social enterprises.
The survey should only take 5-10 minutes to complete and is for any charity, social enterprise or other social purpose organsiation based in the UK, regardless of whether you are currently seeking funding.
Contact
If you’d like to find out more about the SIF Future Needs working group and its current activities, please email the secretariat will.thomson@sibgroup.org.uk