Social Impact Investing: dialogue is key to developing its role in financing services
On Monday 16 February we jointly hosted a conference entitled “Social impact investing and its role in future social public/private investments: continuing dialogue”, which brought together European and national representatives with stakeholders. Co-hosted by Social Platform, Confrontations Europe and the German Federal Association of Non-statutory Welfare (BAGFW), the conference sought to define what we mean by social impact investing, and how it can be best put into practice.
During the first panel on “The different ‘social investment’ approaches in G7 countries: what objectives, what propositions?”, participants heard from a wide-range of national representatives from the UK, Germany, France and Italy, all of whom were involved in G7 task forces exploring the possibilities afforded by social impact investing. Lieve Fransen, Director for Social Policies at the European Commission, responded to these interventions, stating that a clearer distinction between policy and finance is needed in this area; for example, social impact investing concentrates on financing services, whereas the EU’s Social Investment Package focuses on the broader issue of modernising policies surrounding social protection.
Heather Roy, President of Social Platform, intervened on the second panel on “Impact investment: why, where and how?”, and raised her concerns around investment in public services being perceived as a financial risk and a cost, as public services should serve the general interest. She also highlighted that the Investment Plan released by Commission President Jean-Claude Juncker in November last year features no social aspects, which calls into question how the Commission hopes to achieve the ‘triple A’ social rating it has touted as a priority during speeches.
She remarked that the G7 report mainly reflects an investor’s perspective. She appreciated Lieve Fransen’s statement that through social services and social protection systems governments do invest – these are investments in people.
Ms Roy stated that, from an institutional point of view, it is not clear where the area of social economy and social entrepreneurship is owned in the Commission, and questioned whether follow-up to the Strasbourg and Rome events on social entrepreneurship and social economy will be ensured by the new Commission.
Ms Roy closed by warning that care should be taken to avoid making social impact investing itself an overall priority; while important, it is part of a hybrid system for the financing of social services, and should never be used to replace well-funded, accessible public services. Currently lacking is a dialogue on equal footing between public administrations, funders, service providers and users on what we mean by effectiveness of social action: is it about spending money more effectively? Is it about reached the targets set by a funding programme? Or is it improving the lives of people we want to reach with our services? We at Social Platform think it is the latter. However, believe that dialogue is vital for moving forward on these issues.