Lessons from Social Investment

South London Cares

Where our learning comes from

What is social investment and how is it useful for supporting civil society organisations’ goals and resilience?

  • We are interested in helping civil society organisations to develop their resilience so that they are in a stronger position to pursue their goals. One way of developing that strength is to build financial resilience through generating unrestricted income. Increasingly, charities are developing enterprising business models and the number of social enterprises is growing too.

Social ventures often need access to finance to manage cash-flow or to start up, grow, build infrastructure and re-orient their activities

  • Investment (the offer of repayable finance for organisations delivering a social purpose - from an investor who is looking for both social and financial return) can help. It is especially useful for civil society organisations who struggle to access high street loans and, for those who are looking for investors who share their values.

The National Lottery Community Fund has been helping social ventures to access Social Investment by:

  • Working with Access (The Foundation for Social Investment) and Big Society Capital to make unsecured loans and grant-loan packages available through Social Investors, under the Growth Fund
  • Supporting social ventures to prepare for using social investments (for example our Big Potential programme which ran from 2014 and has informed new programmes such as Access’ Reach Fund)
  • Helping social entrepreneurs to broker investment (such as under the Big Venture Challenge programme which ran from 2013)
  • Supporting social enterprise incubators (such as our work for the Government’s Social Incubator Fund which ran from 2012, and the School for Social Entrepreneurs).

Some social investment products are also being developed to help finance early action

  • We are interested in exploring how these arrangements – such as Social Impact Bonds - can help, especially when institutions who want to commission preventative services cannot progress without a) some patient capital to help them release savings through and for the intervention – and/or, b) some risk capital, when a preventative intervention first needs to generate evidence of impact to satisfy a commissioner’s willingness to pay.

So far, The National Lottery Community Fund has been exploring the use of social investment for early action, by:

  • Adding co-commissioning funds to the world’s first Social Impact Bond in Peterborough
  • Supporting innovators to explore social investment mechanisms to support early action (such as through the Next Steps initiative which ran from 2010)
  • Offering development grants so that civil society organisations and local public bodies can explore the feasibility of Social Impact Bonds - development grants remain available through our Partnership Product)
  • Offering local public bodies co-commissioning grants to support them in commissioning initiatives under a Social Impact Bond (- our Commissioning Better Outcomes fund has launched 21 SIBs and we are also helping the Government to deliver its Life Chances Fund)
  • Working with field leaders in early action policy areas and in social investment and commissioning design and practice, to explore the roles of social investment in overcoming barriers to early action (for example, we work closely with the Government Outcomes Lab and the Social Investment Research Council.

Since our work in social investment began in 2010 we have commissioned a number of evaluations and research studies

  • These include some in-depth, long-term evaluations which will generate a number of reports between now and 2023 (such as our Growth Fund and Commissioning Better Outcomes programme evaluations). You can find the reports we have generated so far with some key highlights below.

All publications

Social Impact Bonds evaluations

Commissioning Better Outcomes (CBO) supports organisations to develop and launch social impact bonds (SIB). We want to improve the understanding of SIBs, by capturing learning at all stages of development and delivery, so we’ve commissioned an external evaluation that will evaluate CBO over its nine-year life.

Below are details and links to the reports published from the CBO evaluation.

Summary of the CBO Evaluation strategy

In January 2014 the Big Lottery Fund commissioned Ecorys UK, in partnership with ATQ Consultants, to evaluate the Commissioning Better Outcomes (CBO) Fund over its nine-year life. This report provides a summary of the CBO evaluation aims, objectives and methodology.

CBO update reports

Social Impact Bonds: the state of play
Published: November 2014

This is a scene-setting report for the CBO evaluation. It provides an overview of the SIB landscape in 2014, including the type of SIB that existed and their strengths and challenges. The report draws on evidence from surveys with service providers, commissioners and investors, and a literature review.

Commissioning Better Outcomes: update report 1
: December 2016

This is the first update report written for the CBO evaluation. It draws on the evidence to date to describe early experiences of those developing SIB; as well as the immediate, and potential future, advantages and disadvantages of the approach. Where possible, the report also makes comparisons between the SIB approach and alternative commissioning models. There are three additional versions of this report, which are purposively targeted at investors, commissioners and service providers.

Commissioning Better Outcomes: update report 2
: October 2019

This is the second update report written for the CBO evaluation.

Commissioning Better Outcomes: update report 3 Published: June 2022

This is the third update report written for the CBO evaluation.

CBO Thematic Reports

The CBO Thematic Reports explore different elements of the SIB concept.

Developing Social Impact Bonds: A Commissioner’s Perspective
Published: December 2015

This case study draws on reported experiences of commissioners at North Somerset Council, who at the time of writing were setting up a Social Impact Bond aiming to reduce the number of looked after children aged between 10 and 17.

The LOUD SIB Model: Four factors that determine whether a social impact bond is launched
Published: October 2017

This report describe the factors necessary in launching a social impact bond (SIB). It combines the findings from separate research undertaken by Ecorys UK and the Policy Innovation Research Unit (PIRU) at the London School of Hygiene & Tropical Medicine.

CBO In-Depth Review Report

The aim of In-depth Review reports is to capture in detail learning from commissioners, investors and service providers involved in specific SIBs funded by CBO. Each review is comprised of three waves of research, which are then incorporated into one report for the selected SIB projects. The first wave of research draws on stakeholder experiences up to the SIB contracts being signed. The second report draws on experiences up to mid-way in the SIB project. The third report draws on experience at the end of the SIB project. The evaluation plans to conduct reviews with 10 SIB projects during the CBO project lifetime.

Ways to Wellness SIB: The UK’s first health SIB
Launched 2015

Reconnections SIB: Reducing Loneliness in Worcestershire
Launched 2015

Mental Health and Employment Partnerships SIB
Launched 2016

The Mayday Trust SIB: Be the Change
Launched 2016

Individual Placement Support: A SIB model

West London Zone SIB

HCT Independent Travel Training SIB

Elton John AIDS Foundation - Zero HIV SIB

Positive Families Partnership SIB

North-West London End of Life Care Telemedicine SIB

Blogs about in-depth review reports

Final England Knowledge Club Event for CBO

On 2 November 2022, our evaluator Ecorys hosted a learning event bringing together stakeholders from some of the SIBs who received funding through the CBO programme. You can watch presentations by Joe Prendiville from West London Zone and Jonathan Gill and Lucy Pennie from Positive Families Partnership in this video:

Growth Fund (unsecured lending) evaluation

The Growth Fund is a partnership between The National Lottery Community Fund and Big Society Capital, delivered by Access through a range of social investors. It makes up to £50m available to support charities and social enterprises to grow and create social impact in their communities. The Growth Fund uses a combination of grant funding, made possible thanks to National Lottery players, and loan finance from Big Society Capital and other co-investors, to address specific gaps in the social investment market.

Evaluation update reports

Thematic reports

As we move into the next stages of the evaluation, we explore how social investment can support VCSEs to become more resilient, achieve their social mission and avoid mission drift.

  • Financial Resilience Report April 2024 (PDF 495KB)
    This report outlines key learning on how VCSEs perceive financial resilience and what helps or hinders this. It may be of interest to VCSEs and the organisations who support them.
  • Growth Fund Business Models report March 2023 (PDF, 2.9MB)
    In order to understand what Growth Fund VCSEs’ business models are, and how this leads to them taking on social investment, we explore here how VCSEs – with different missions, delivery models, income generation approaches and at different stages of their business development – take on and use social investment.


Social enterprise and investment market development research

We worked with Big Society Capital, City of London Corporation and Government to commission a report about the social investment landscape. ICF GHK in association with BMG Research carried out the research in 2013. The results of this work are in these reports:


In 2012 we commissioned work to help us better understand when social investment works best. The report investigated:

  • What investment-readiness means
  • The barriers to becoming investment-ready
  • The support needed to become investment-ready and how The National Lottery Community Fund and other funders can help.

You can read more about our findings in the following reports:

Mapping Social Enterprise in Scotland

We mapped social enterprises and their activity across Scotland, allowing us to understand their prevalence, scale, characteristics, reach, distribution and financial health. This has given us a baseline from which we can measure the difference made by our social investment-themed initiatives in Scotland.

Learning about the impact of our funding on social enterprises

In 2014, we commissioned Social Enterprise UK to evaluate the impact that our funding has had on social enterprises so we can improve our support for social enterprises in the future:

Learning about the impact of The National Lottery Community Fund's funding on social enterprises (Word, 561KB)

Understanding the capacity and need to take on investment within the social sector

In 2015 the Social Investment Research Council ;– which The National Lottery Community Fund is a member of - commissioned NCVO to use new methods of accessing and using charity sector data to build an understanding of the potential demand for social investment.