“We can’t build this movement alone”: CEO reflects on ten years of Big Society Capital

(Image: Big Society Capital)

In his thought piece for ICON, Stephen Muers, CEO of Big Society Capital, looks back at the journey social impact-led investment has taken.


Social impact investment has a long history. One of the earliest examples of social investment in the UK is the Sir Thomas White Loan Charity in Leicester, which was founded in 1542 to make loans to local businesses and is still in operation today.

More recently, ethical lenders such as Unity Trust Bank and Triodos Bank were operating by the end of the 20th century. Then the dawn of the new millennium saw several social impact investment initiatives instigated by both Labour and Conservative Governments, as well as the social and business sectors.

Born from this growing interest, Big Society Capital launched in 2012. Led by international philanthropist and venture capitalist, Sir Ronald Cohen, and Nick O’Donohoe, former Head of Global Research at JP Morgan, as Chair and CEO respectively. It was set up as an independent financial institution with a mission to grow and develop social impact investment in the UK.

In total Big Society Capital received £400 million of dormant account money (money from bank accounts that had not been used for more than 15 years), and £200 million from four high street banks. The first investment we made was £2.7 million into The Foundry, an affordable office space for social enterprises and charities in Vauxhall.


No longer niche

Ten years later and social impact investment has come a long way; with increasing numbers of investors, investees and other partners taking social impact investment seriously. This is reflected in the size of the market – which increased by almost eight-fold between 2011-2020: from £833 million to £6.4 billion.

These figures are reflected in the number of frontline organisations that we have been able to support. So far, we have alongside partners helped channel £2.5 billion into investments to more than 2,000 social enterprises and charities tackling issues including homelessness, mental ill health and childhood obesity. Working in partnership has been essential to this success, which we could not have achieved alone. And we believe this trajectory will only continue – estimating that the market will grow to £10-15 billion by 2025.


Important areas of growth

Over the last decade, we have learned what works when ideas, investment and expertise are united – and using this knowledge we have since last year been focusing on four key investment areas where we believe we can make the biggest difference.

The first is social lending, which encompasses a range of debt tools, from small, unsecured loans to charity bonds and bank loans, that can be used by charities, social enterprises and social-purpose organisations to sustain and grow their impact.

One example is the £150,000 of debt finance taken on by charity Power 2, a young person’s wellbeing charity which used the investment to set up an online mentoring service to support young people with their schoolwork during lockdown.

Another developing market is social property – which grew from £350 million in 2016 to £3 billion in 2020 – with inflows heavily driven by private capital from institutional investors.

These funds offer lifeline support to individuals who are not served by mainstream home markets; such as the 800+ homes leased to people who had been living in inappropriate accommodation (such as hostels or private B&Bs) provided by a partnership between homelessness charity St Mungo’s and Resonance; and Hull Women’s Network, which together with Social and Sustainable Capital created a social impact investment solution to help provide safe homes for 200 women fleeing domestic abuse.

There have also to-date been 90 Outcomes Partnerships, which address complex social issues using upfront investor capital that is only paid back by government funding once specific outcomes have been delivered.

One example is the Greater Manchester Better Outcomes Partnership – which will support 1,500 young people at risk of homelessness in the Greater Manchester area with a progression coach to help with their mental health.

A final investment focus area is impact venture, as new entrants into the impact market recognise the role of tech-enabled models in tackling social challenges such as mental health and financial inclusion. For example, social impact investment helped Wagestream roll out its app which helps employees build up financial resilience.

2020 saw for the first time the opportunity to invest in high impact investments through the Schroder BSC Social Impact Trust – which enables ordinary investors to see their money have a positive impact on local communities, as well as producing a financial return.

We have also seen more commitment from the public sector to supporting these funds than before; for example, last year central Government provided unprecedented support for social property funds in the form of a £15 million grant to a collection of funds tackling homelessness.


Future challenges

The market still has a lot of work to do and faces many challenges. For example, recent data collected by the Equality Impact Investing Project demonstrated that Black and Minoritised Ethnicity-led charities and social enterprises faced more barriers in accessing emergency social impact investment funding at the onset of the pandemic.

However, we are determined to make progress – through measures such as signing up to the sector-wide Diversity Manifesto and reviewing our investment process across the board to improve our decision-making.

We were also recently encouraged to see £4 million of new finance being directed towards specifically supporting Black and Minoritised Ethnicity-led charities and social enterprises in recovering from COVID-19 as part of the Recovery Loan Fund; as well as the launch of a new £25 million equality and racial justice fund developed by UnLtd, Big Issue Invest and Shift.

We look forward to continuing to work with partners across the sector to take on challenges like these, and to continue scaling the impact of social impact investment for more communities across the UK at a time when it has never been more needed.




Stephen Muers joined Big Society Capital from the Civil Service, where he held the post of Director, Criminal Justice Policy at the Ministry of Justice, and before that, senior posts in the Cabinet Office and Department for Energy and Climate Change.

He is the Chair of Friends Provident Foundation, a charity that makes grants and uses its endowment towards a fair and sustainable economic system that serves society and a Trustee of Fair Trials, a global criminal justice watchdog. He is a Policy Fellow at the Institute of Policy Research, University of Bath, and his book, ‘Culture and Values at the Heart of Policy Making’, was published in 2020.