CAF Venturesome was honoured to have recently hosted a session at OxfordJam during the event’s fifth anniversary year. OxfordJam, a fringe event to the Skoll World Forum on social entrepreneurship, is a dynamic collection of sessions exploring a range of zeitgeist issues for the social economy. OxfordJam ’14 took place at Arts at the Old Fire Station, a charity and social enterprise in the heart of Oxford, and a CAF Venturesome investee.
Our session explored how social investment finance intermediaries (“SIFIs”) can contribute to social good, beyond passing on finance from investors to investees. For if social good is magic, then what is the ‘Magic in the Middle’, beyond just being the title for our session?
We approached the session by looking at what the two key SIFI stakeholders – investors and social ventures – would like to see SIFIs do in order to make a greater contribution to the social good. By looking at both sides of the equation, we hoped to raise awareness of the competing expectations of investors and ventures and subsequently work towards shaping shared objectives between the two.
Through the vehicle of ‘magic’ hats, paper rabbits and the spirit of Paul Daniels, we got our audience put themselves in the shoes of investors and social ventures in turn and brainstorm all the different things they’d like to see SIFIs do more of. In the end, we collated the ideas into categories of financial product, capacity building, connectivity, values and process.
This (non-scientific!) activity showed that from a social venture’s perspective, what mattered most is:
× Support with strengthening organisational and financial capacities, including advice on legal structures, governance, impact measurement, pitching, financial literacy and financial planning
× Flexibility in financial product that is tailored to meet their needs
Investors, on the other hand, were overwhelmingly more process orientated in what they wanted like to see in SIFIs, focusing on:
× How risk is reduced and the quality of due diligence
× Monitoring and evaluation
× The possibility of exiting from the fund
Take a look at the full roster of ideas below:
It was somewhat surprising that there was little overlap in what the audience expected investors and ventures to prioritise. In Venturesome’s experience, both parties tend to prize the values of sector expertise and transparency in intermediaries.
In the concluding discussion to the session, somebody made a rather poignant observation: “Perhaps the greatest common good that SIFIs create is to help investors and ventures to understand one another.” That’s a point particularly true for social investment intermediaries that often have to deal with commercially minded investors and socially minded investees. SIFIs have a crucial role to play as an interpreter, connecting the two worlds by translating one party’s interests into the language of the other.
We hope that for our audience, our session conjured up the following take-aways:
- SIFIs can have a diverse role to play in contributing to the social good – beyond just managing capital
- SIFIs have to manage the competing demands from the ventures they seek to support and the investors they seek to court – it comes with the territory of being an ‘interpreter’
So what next? We’ll be incorporating the session findings into our ongoing work to better tailor our products to the social enterprise market. And we hope that we can start a wider conversation amongst SIFIs about their role in doing good.