What is Social Impact Investment?

Impact investors, especially those working in specific sectors, often have a better understanding of enterprises’ business models and are better able to assess the risks of investing in them. This can often result in making investments in organisations that are unable to secure finance from mainstream sources. Aside from sharing risk, impact investors have experience of working with organisations like yours – they want to support the outcomes that are important to you.

Impact investors often take an engaged approach with organisations they lend to – for example, by providing additional expertise or introductions to new business opportunities. They can also offer networks, insights and experience that a commercial lender or bank could not provide.

Cultural and creative organisations have a long history of working in different social impact areas, but many have room to improve how they demonstrate the change they create. By focusing explicitly on the impact of organisations, this type of investment can help improve the standards of evidence they collect and enhance their impact measurement capabilities. Investors achieve this by introducing organisations to a range of tools, such as theory of change, and by creating a framework for monitoring social impact once an investment has been made.