Today’s the UK’s first Social Saturday, a day to celebrate social enterprises – businesses driven by a social mission. Rob Parker at the Cabinet Office wants to know whether you’d make a social investment.
The Better Leisure Centres, Big Issue, Divine Chocolate and Jamie Oliver’s Fifteen are just a few well known social enterprises. There are many more than you think – roughly one in five SMEs (small and medium enterprises) are a social enterprise, and they contribute more than £55bn to the economy each year.
A social enterprise is a business that trades to tackle social problems, improve communities and people’s life chances. They go beyond other businesses in that they make profit from selling goods and services, but then reinvest that profit back into the social cause.
Making a social investment
This Social Saturday many of us will be buying social. But what about our savings and investments? Well, there are social options here too.
I’m a Senior Policy Advisor at the Cabinet Office and I want you to know that it’s also easy to make a social investment. This is where you can put your money into businesses whose mission you support, leading to social and financial benefits. Check out our video for some successful examples:
The UK social investment market has grown rapidly over the past 10 years. It’s benefitted from government support over that time, including the creation of Big Society Capital, the first social investment bank.
The risks of social investment
Many people who come across social investment love the overall proposition – using their cash to contribute to social good. But some worry that social investments are too high risk, or too difficult to do.
The good news is that there are an increasing range of options, both for those looking to save for a rainy day and for those wanting to take higher risks. For example, if you’re looking to use your money for good while protecting your capital, you can put your money into a social bank or building society that will then invest in organisations that have a social impact. You might also look to put your money into a mainstream stocks and shares Social ISA.
Alternatively, invest directly into an organisation that matters to you and you could benefit from the social investment tax relief, which gives a reduction in your income tax bill. However, just like a mainstream investment, your money is likely to be more at risk than it is with savings products.
Achieve social change
Social investment offers a new way to achieve social change by helping the organisations and causes people care about to get the finance they need to set up and grow. In a way, it’s about letting us save more than our money.
But what do you think? Is making a social investment something you’d do? Would you consider a slightly lower financial return if you know you would get a social return too? And what if the financial returns were the same as you could get elsewhere?
Which? Conversation provides guest spots to external contributors. This is from Rob Parker at the Cabinet Office. All opinions expressed here are Rob’s own, not necessarily those of Which?.
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