What is Social Impact Investment?
Find out more about social impact investment and whether it’s the right option for your organisation.
Find out more about social impact investment and whether it’s the right option for your organisation.
Social impact investment is the use of repayable finance to achieve social outcomes as well as financial returns. Whilst not a replacement for grant support, social impact investment can help funding for culture and creativity go further since the money that is repaid to investors can be recycled to support more organisations, helping to achieve a greater total impact.
There can be benefits to using social impact investment to finance your ambitions. While it has to be repaid, this type of finance is more flexible with regard to how funds are spent, giving organisations greater control over their finances. There are several other advantages too.
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.
Visit Good Finance’s website for an in-depth overview of social impact investment, types of investment and information about other social lenders. You can also find further support on our Resources page.
Explore our portfolio to learn how our investments and programmes support cultural organisations of all types.
Figurative’s philanthropy team partnered with the Middlesbrough Cultural Partnership to help revitalise the city’s creative sector and increase local philanthropic support.
Figurative was invited to Japan to share insights into how impact investing can help develop a more self-sustaining cultural and creative sector.
In February 2024, Figurative’s Fran Sanderson presented to a Financing Media Freedom conference in Brussels on blended finance models and their applicability to mixed model economies.
Image credits:
The Nutcracker: Céline Gittens as the Rose Fairy with Yasuo Atsuji as her Consort with Artists of Birmingham Royal Ballet; photo: Andrew Ross. Find out more about our work with Birmingham Royal Ballet here.