Confidence in impact investment soars in UK despite ‘difficult’ process – research
- Confidence grows five-fold across the board, but investors more likely to have high confidence in social investment than investees
- Six in ten say process difficult and challenging; communication and consistency highlighted as areas for improvement
Social sector confidence in impact investment has grown, but many still find the process “challenging and difficult”, according to a survey of UK social investors, intermediaries and investees.
The new research, commissioned by Big Society Capital at the start of 2021, shows that overall confidence in impact investing has grown five-fold since 2018, with 56% of respondents reporting “high” levels of confidence, compared with just 10% in 2018. The share of respondents saying they feel “well informed” on the subject has grown in similar proportions – from 10% in 2018 to 53% this year.
However, six in ten say the social investment process is challenging and difficult. Areas for improvement proposed by respondents include clearer communication (for example clarity on use of terminology and definitions); a greater standardisation across the sector, with more consistency in approach and process; more flexible and innovative funding models that suit more organisations; improving knowledge and data sharing, for example via online portals; and more networking.
Investees tend to be less satisfied with their experience of social investment than investors
The survey collected 364 responses from individuals in investor, intermediary and investee roles and from organisations (including charities, social enterprises, foundations, banks, fund managers, educational institutes and local authorities).
Levels of confidence in social investment vary among respondents, with investors more likely to feel confident and informed than investees: 69% of investors surveyed say they are highly confident and 66% report being well informed on the subject. In comparison, just 43% of investees say they are highly confident, and 42% say they feel well informed.
Investees also tend to be less satisfied with their experience of social investment than investors: 15% of investees report being dissatisfied, and 38% highly satisfied, while 8% of investors report being dissatisfied and 48% highly satisfied.
But the majority of investees say they are satisfied with the outcomes and actual impact of the investment: on both measures, more than half (55%) of investees surveyed said they were highly satisfied, and another 30% somewhat satisfied.
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