Social enterprises 'must use hard evidence to attract investors'

Organisations with philanthropic goals must provide "hard evidence" of "soft outcomes" if they want to attract more social investment of private wealth, it has been claimed.

Writing for the Guardian, a business expert explained that there are ways of measuring intangible results, such as the social impact of an investment in a health or community scheme.

Rebecca Birkbeck, director of consulting strategy for Deloitte, said that potential investors in these kinds of funds and enterprises want to achieve social and financial returns.

She suggested that social enterprises must do more to provide evidence of their success if they wish to prioritise social impact over maximising profits, with investors likely to be wary about how sustainable they are as businesses if they only provide evidence of "soft" results, or impacts that are difficult to quantify.

"While [these anecdotal data] provide a powerful and engaging narrative, they may not suffice to make an assessment of the overall social impact the business delivers to society or whether a potential investment represents value for money," Ms Birkbeck wrote.

To improve their chances of attracting financing, these businesses should, therefore, set out a clear business plan; address "business" topics such as cost management and marketing; and demonstrate the quality of business skills and management capability at their disposal.

Cabinet secretary Sir Jeremy Heywood has called for a kitemark for social policy schemes, which would allow potential investors to more easily identify organisations that are ready for investment.

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