Social investment increases ten-fold over last decade, figures suggest

Investment in social impact in the UK has grown ten-fold over the last decade, according to analysis by Big Society Capital.

It shows that £7.9bn in social investment was made in 2021, compared to £803m in 2011.

Of investments made 60% were in the UK’s most deprived areas, which 82% were made to charities and social enterprises outside London.

The figures have been released through the social investment funder’s annual Market Sizing data gathering.

This shows there was a 22% increase in social investment amid the Covid pandemic.

During 2021 the figures add that £1.6bn worth of social finance has been committed across 1,300 investments.

With £3.8bn in funding, investment in social and affordable housing accounts for the largest segment of the social finance market.

“It is promising to see these figures – which demonstrate both an increasing investor appetite for creating positive change to people’s lives, and the ability of this market to stay resilient during the extremely challenging circumstances resulting from the pandemic," said Big Society Capital chief executive Stephen Muers.

“As the economic crisis worsens, the need for social impact investment to support social enterprises, charities and community enterprises will be ever more critical.”

Charity sector leaders hope that the planned expansion of the dormant assets scheme will be used to boost further social investment opportunities for charities, in particular Black led not for profit organisations.

The government is looking to more than double the size of funding available through the Dormant Assets scheme to include £880m in assets from the insurance, pensions, investment and securities sectors.

Meurs added: “Considering how social impact investment can play a role in alleviating the economic crisis will be particularly timely as government looks at how to allocate further dormant assets.”

Sarah Gordon, chief executive at the Impact Investing Institute, added: "There has never been a greater need for social investment in the face of the cost-of-living crisis and the climate emergency. It is therefore very encouraging to see the growth in the market that this report demonstrates.

“Now we need to see greater collaboration between government, institutional investors and social investors so that different sources of capital can work together more effectively to reduce regional inequalities across the UK and deliver positive social and environmental impact as well as a financial return."

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