What is the secret of the social investment illuminati?

It seems that social investors are human – even those who used to work for vampires. Matt Black, Head of Community at Numbers for Good, offers some straight talking advice on how to approach these strange creatures

For the uninitiated, social investment is bewildering. Awash with jargon, confusing acronyms, complicated financial structures and interminable terminology, this perception is not helped when politicians herald social investment as the panacea to charities’ funding constraints.

With raised expectations, social enterprises and charities (or to use the social investor’s acronym of choice ‘VCSEs’) embark on their search for investment brimming with enthusiasm, only to emerge on the other side bruised, confused and without the briefcase full of cash they had hoped to find.

Many struggle to find simple answers to simple questions. What size investment is appropriate for my organisation? If my social impact is larger, will I get a cheaper deal? Who has this investor worked with before and how have their investments performed?

When organisations struggle to find answers to these questions, uncertainty fills the void. What is it exactly that these nefarious ex-bankers are trying to hide?

So, what is the big secret of the social investment illuminati? The mundane truth is many are just bad at communicating. While some social investment websites may be hard to use or lack key information, almost every social investor I’ve ever met has been highly empathetic, socially motivated, intelligent and honest about what they can and can’t invest in, whether or not they used to work for a vampire squid investment firm.

Finding out information online can be a hard and the language barrier is a problem (the social investment sector – including some of my colleagues at Numbers for Good – really, really love jargon), but a lot can be discovered by picking up the telephone and calling a few social investors up. All will tell you what they look for in a deal, including how much they invest, what types of organisation they look for and what rate of return they seek. And if they can’t help, they will give you the telephone number of someone who can.

In an afternoon’s ring-around, not only will you discover the rates they offer but you’ll get a feel for the personality and approach of the people making the investment decisions, which is just as important as the cold hard cash. When the going gets tough – and you know it will – will the people you owe money to have your back?

I’m still at a loss to why social investors don’t make better use of their websites. There’s a huge competitive advantage to be straight talking, simple and cutting out the meaningless jargon. A ‘Compare the Market’ style one-stop-shop would be helpful too, as recommended by the excellent report by the Alternative Commission on Social Investment. In the meantime though, remember it’s good to talk.

This article was originally published in Pioneers Post Quarterly, the printed edition of www.pioneerspost.com

Photo credit: Miki Yoshihito

 

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