Last Thursday saw the Social Impact Investment Summit at 11 Downing Street. One hundred angel investors were invited by Francis Maude, Minister for the Cabinet Office, to encourage more socially motivated investing. Maude said: “Like many start-up businesses, fledgling social ventures often face persistent barriers which can prevent them succeeding, such as lack of finance, lack of expertise and limited access to markets. For many promising enterprises, the support from angel investors represents the ‘big break’ that can help them overcome these barriers and fulfil their potential.”
Bojo bigs up social housing
And it seems Maude isn’t the only government big-wig backing social investment. Earlier on this month Boris Johnson announced a new partnership with Big Issue Invest. The Mayor of London has selected the organisation for an investment of £10 million from the Housing Covenant Fund. The money will see empty properties renovated into affordable housing for Londoners, whilst the development will create job opportunities for adults with a history of homelessness and long-term unemployment.
SRI hits mainstream
The Government’s support for social impact investment comes as part of a wider trend outlined by Katherine Garrett-Cox, chief executive of Alliance Trust, last Tuesday. Garrett-Cox described 2014 as a “watershed year in the long and varied history of investing… a year when socially responsible investing considerations finally entered the mainstream.” And with the rise in the Social Investment Tax Relief (SITR) cap it seems 2015 is only going to see continued growth in the trend as investors are presented with real financial incentives for ‘going social.’ Theresa Burton, Buzzbnk chief executive, said: “The increase in the cap for Social Investment Tax Relief (SITR) eligibility to £5 million per organisation per year shows that social lending and investing is coming of age. The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) are the bedrock of equity crowdfunding in the UK, which grew by 250 per cent this year. SITR now offers the same level of tax benefits for socially-motivated lenders and investors, and will boost the social investment sector significantly.” If you want to learn more about the Social Investment Tax Relief scheme, ClearlySo.com has published a fantastic, easily digestible infographic, which you can see here.