Alastair Davis writes about 20 years of Social Investment Scotland
This year marks the 20th anniversary of Social Investment Scotland (SIS), once seen as a niche lender to Scotland’s third sector and now established as one of our leading responsible finance providers.
Scotland’s social investment marketplace has come a long way in those 20 years.
Back in 2001, when Social Investment Scotland (SIS) was first set up, we invested around £500,000 in social enterprises and community organisations during our inaugural year. Fast forward to 2020, and that figure grew to a record £10.9 million, with £4.36 million invested in social enterprises and communities, and the remainder invested in supporting the growing sector of responsible lenders (CDFIs) and in mission-driven businesses.
While much has changed during those two decades, the numbers tell a clear story. One of a vibrant social enterprise sector which has increasingly embraced social investment and evolved with the times to play an ever-increasingly influential role in Scotland’s economy. The most recent Social Enterprise Census of Scotland revealed that there are more than 6,000 social enterprises currently operating in Scotland, contributing £2.3bn in GVA to Scotland’s economy.
SIS’s remit has remained largely unchanged for many years, with a mission ‘to connect capital with communities, to make a real measurable and sustainable impact upon peoples’ lives’.
What has progressed since we first opened our doors is the range of resources beyond just the financial that SIS connects with communities, alongside the business support, leadership development and scale programmes that we provide. Our own development as an organisation has occurred within a maturing market for social investment which has gradually gained sufficient momentum to move into the mainstream and away from being seen only as a ‘niche’ product.
Although some charities and social enterprises still remain unsure of social investment, many more organisations have embraced it as a means of building their sustainability and growing their impact. This is supported by a growing range of funds at SIS but also access to greater choice from other funders in Scotland who have developed their own social investment offering.
For many entrepreneurs, social enterprise has become a ‘business model of choice’ and they are actively looking for investment to sustain and grow their activity and impact. However, the investor landscape has also changed, in line with a growing appetite for social investment, with a much greater diversity of organisations and individuals exploring how they might invest their capital for social and financial return.
This diversity is reflected in SIS’s own investor pool which includes the more traditional funds from government and charitable trusts, but also now increasingly attracts other investors such as high-net worth individuals and academic institutions. So what does the future hold for SIS and for social investment. In order to stay relevant, we need to continue innovating that’s for sure. Our ‘Building an Impact Economy’ strategy is extremely ambitious and explores a range of ways in which social enterprises might play a more meaningful role in the mainstream.
I’d love to see huge progress being made towards these aims in the next five years - consumers buying more social enterprise products, investors making more social investments and public and private sector procurement providing more contract opportunities for social enterprise. I believe we can get there and I believe Scotland can continue to lead the way.
Alastair Davis is chief executive of Social Investment Scotland