Starting from zero
BWC has been interested in social investment since the Charity Commission updated its guidance on Charities and Investment Matters in 2011 (known as CC14). For the first time this allowed charities to invest their funds to achieve a social impact as well as a financial return - the definition of social investment - rather than for financial return alone.
Most of our income comes from investments managed for us to produce the best total financial return within an acceptable level of risk. The money generated is spent on furthering our charitable aims - the relief of sickness and poverty, and the advancement of health.
Most funding organisations’ portfolios are managed in this way, but it means that our funds could be invested in organisations with activities far removed from our objectives. In 2013 we therefore set aside £1 million to be used specifically for social investment. This complements the services that we provide directly to our beneficiaries through our staffed helpline. We have been able to achieve a financial return at the same time as directly furthering our aims and increasing our overall social impact.
An established investor
We now have £3 million in funds available for social investment, of which nearly £2 million is committed at November 2019. We collaborate with the other main social investing organisations, often co-investing and sharing the costs of due diligence investigation and legal documentation. Because of our provenance in the financial services industry, and despite our relatively small size, we often take a more adventurous investment stance than other investors.
Shaping the market
We also contribute to the development of the social investment market by serving on the Steering Committee of the Social Impact Investors Group, which supports Foundations, Trusts and other organisations that are interested in social impact investing.