Our Impact
With SIB’s current strategy, our commitment to investing for impact, along with our conscious approach to defining what impact means for us, continues. The SIB impact categories are our answer to the question: “What does it mean to be impact-led?”
They focus on how a business operates across six core areas. These are:
Our six core categories
Business model
This focuses on business structures that are more likely to lead to equitable behaviour and outcomes for workers and communities.
Employment
This focuses on employment practives that are more likely to lead to equitable outcomes for lower wage earners.
Equalities
This assesses the business’s focus on reaching and involving marginalised workers, members and communities.
Market
This centres on the need for the product or service, alongside quality standards.
Community
This assesses community voice, the business impact on its supply chain and trading for community benefit.
Financial Sustainability
This assesses how an organisation is supporting itself to be financially sustainable, including good financial practices, oversight of reserves and investors, as well as diversity of income.
Our early funds like Futurebuilders and Communitybuilders were not established with the strong foundation of impact measurement that we now have. Our work on understanding the effectiveness of these funds has had to work backwards from our current knowledge. In the Where and How sections of this report, we detail the financial metrics we have developed, and in particular the formula for calculating MIRR that we have tested rigorously on the Futurebuilders. Developing these metrics is an important step, not only for SIB in understanding FBE, but in creating standard metrics that can be used across other funds as well, both internally, and externally with partners and the wider social investment market.
Financial metrics are only a first step. They help us to understand how social investment funds can function at a manageable cost to the state and to philanthropists interested in making some of their available finance recyclable, they also help to develop more viable business models for fund managers like us. Hopefully having these more robust measures will encourage more money to be made available flexibly, patiently and affordably to the social economy.
The next step is to understand more about how the finance that SIB provides through loan, blended finance and grant programmes supports social purpose organisations to deliver their work. On these questions in particular we have made progress in the last 12 months in three key areas, in better understanding where our funding is directed, who can access that funding, and how that funding is best provided. The next sections give a little more insight into the impact that SIB is having nationally, within particular sectors and, most recently, reaching underrepresented groups. Finally we look at the process for accessing finance, and consider the impact of different approaches to application and assessment.
