Rats and social investment? Let me explain…..
It’s not every day that you get inspired by a story about rats, but that’s exactly what happened to me at the Good Deals 2013 conference last week. The social enterprise Apopo trains rats to sniff out landmines and tuberculosis in developing countries – saving the lives and limbs of tens of thousands of people and bringing many hectares of land back into productive use. I heard many stories last week but it was hearing Bart Weetjens, the founder of Apopo speak passionately about what they do that reminded me of why I got into social investment. At Nesta Impact Investments we hear from (and invest in) social entrepreneurs that are coming up with innovative solutions to some of the most difficult problems across the UK. Some of these solutions will make it and will have a real and lasting difference on people’s lives.
However what the Good deals 13 conference also reminded me is that we still have some way to go when it comes to getting the message out about social investment.
So what are the areas where we could be doing better?
- The language and vocabulary of social investment is still unclear. Even the inspiring Apopo project used the term ‘investment’ when it later became clear – when asked- that they specifically meant grants. We need to call a spade a spade and be more precise – instead of grouping all kinds of financing under the umbrella of ‘investment’, let’s call a grant a grant; an equity investment an equity investment; and the same for all that’s in-between.
- The challenge of social impact versus scale from the social investor perspective was also debated in more than one session. Can organisations with a strong social impact really be scaled up? For me, the answer to this question is a resounding yes and Apopo (along with many others) is a perfect example of there not being a trade-off between scale and impact – in fact, in Apopo’s case they go hand in hand. And for those interventions that aren’t designed to scale, it’s just a matter of picking the right type of investment instrument to meet their needs and suit their model.
- Evidence of impact is still a lively issue; from evidencing social impact through to the effectiveness of social impact bonds. Whilst many organisations, including ourselves, are committed to the issue, it seems there is a need for more independent, rigorous research at the sector level to create evidence that we can build on for the future.
These challenges are no bad thing. They’re a sign of an evolving market and things we need to improve on collectively to make the social investment sector stronger and more effective. Being tighter on our language; having confidence in the ability for social organisations to scale; and growing the evidence base on specific aspects are three challenges we are all trying to tackle. Every now and again it is worth reminding ourselves why getting these issues right is so important, and certainly an inspiring story about rats did it for me.
By Isabel Newman - Nesta Impact Investments