Big Society Capital Impact Report

Impact Report 2023 | Schroder BSC Social Impact Trust plc

Schroder BSC Social Impact Trust plc | Impact Report 2023

Key aspects of good impact practice

Holistic assessment of the social issue and investment solution Why? Social impact investment models typically interact with a wide range of stakeholders, and target

How? Investments include evidence-based impact theses with detailed consideration of key stakeholders, variables and externalities. Fund managers have clear processes for monitoring and managing impact risks.

outcomes that are dependent on multiple variables. In-depth assessment of these variables can identify potential limitations, opportunities to improve, and risks of unintended and negative impacts.

Partnerships with experienced social organisations

Why? Enhancing the scale and capacity of social organisations is central to delivering better impact for society. Social impact interventions require organisations with deep knowledge of target groups, and the ability to provide reliable, high- quality services. Organisational failure is both a financial risk for investors, and a social impact risk for clients; for example, people in supported housing, or students receiving additional learning support. Ensuring organisations are robust and able to maintain operations throughout economic cycles is therefore crucial.

How? Fund managers demonstrate an ability to identify and engage with suitable social organisations as recipients of funding, delivery partners, counterparties and/or external actors to ensure quality and social mission alignment. Investees and delivery partners demonstrate strong track records, an ability to take on investment and maintain and/or expand operations. Evidence includes SBSI and fund manager assessment of frontline organisation years of operation, size and financial health. Fund manager financial and non-financial support is tailored to optimise organisational resilience and growth.

Integrating user voice into service design and delivery

Why? Impact and financial returns are dependent on provision of services that are accessible and relevant to the needs of underserved and disadvantaged people. Without knowing what people want, efforts to achieve positive social impact may fail or create harm. Continuous dialogue is crucial to ensure services are fit for purpose, and to build a sense of community, reciprocity and agency between those who use services and those who provide them. This, in turn, enhances the prospects of delivering social change and building long term, scalable service delivery models.

How? Frontline investee organisations integrate user experience in to product and service design and delivery. Mechanisms are in place to ensure user feedback is captured and acted upon at frontline and/or fund manager level. Interventions are accountable to users. Assessed at investment through review of fund manager impact measurement systems, portfolio manager research and a look-through assessment of frontline organisation engagement with end users.

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