Following Prime Minister David Cameron’s speech setting out his vision for the Big Society, a new report outlines how social investment can help make charities, community groups and social enterprises meet the financial challenge of taking on this larger role in delivering local services.

Understanding Social Investment is a collection of articles by a range of experts in the sector, which outlines how demand for finance is growing as civil society organisations look to increase their businesses and become more financially sustainable.

Each chapter in the report explains how different models of social investing – where investment has a primary aim of delivering a social good – can help both local public services and community organisations weather the economic downturn.

The report, produced by ACEVO, The Social Investment Business and RBS includes chapters on:

• Community asset ownership – how local people can take over management of community buildings such as village pubs, empty high street shops and disused churches

• Social impact bonds – with which private investors can make financial returns from funding the delivery of public sector targets and drive performance improvements

• Investment readiness - practical advice to community organisations on how to draft business plans, define their markets and make financial forecasts.

Commenting, The Social Investment Business chief executive, Jonathan Lewis said: “The government has said that civil society organisations like charities, community groups and social enterprises are at the heart of their vision for the Big Society.

"However, many such organisations are very small and financially fragile and may struggle to survive over the months ahead, even as the demands for their vital services increases.

“Realising the vision of a Big Society with a multitude of capable and resourced charities and social enterprises is essential, but will require big changes - new ways of strengthening the sector, and new ways of organising the sector. This report explains some of the variety of ways these organisations can find the finance to make this vision a reality.”

Peter Kyle, deputy CEO of ACEVO, added: “A huge weight of expectation rests on the sector; we have in front of us an unprecedented opportunity rise up to the challenge, and show what impact we can have, particularly in the context of public cuts and the Big Society agenda. Yet currently the sector is chronically undercapitalised.

“Social investment, therefore, is key. Social investment will be the driving force underpinning an increased flow of capital into the sector, enabling more sustainable, more long term and more innovative approaches.”

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