Social Investment Manifesto

Building social finance that works for social enterprises

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"The potential of social enterprise is extraordinary. Access to suitable finance determines whether we realise it. ".

Social enterprise is critical to reimagining business to create better and more sustainable outcomes for people and planet. While the funding potential is there, the two ecosystems – social investment and social enterprise – remain disconnected. There is a significant untapped opportunity to fund, support and harness the potential of innovative social enterprises. The Social Investment Manifesto sets out a blueprint for closing this gap.

Drawing on consultation with organisations from over 50 countries from across the social finance ecosystem, the Manifesto features recommendations, best practice case studies and practical examples of how to apply the findings whether you are a social enterprise, investor, funder, policymaker or intermediary.

The global picture

10000000 and more social enterprises exist worldwide

2000000000000 or more is generated by social enterprises in revenue annually

2000000 jobs are created by social enterprises

* Data from World Economic Forum’s The State of Social Enterprise: A Review of Global Data 2013–2023 (April 2024). | Read here

Key findings

From surveyed social enterprises:

  • 62% believe that flexible finance is the number one missing instrument for social enterprise development.
  • 43% are ineligible for finance primarily due to their legal structure or registration status. 
  • 49% identify unrealistic financial return requirements as a barrier to accessing finance.
  • 36% agree that non-financial support alongside finance would help them create impact.
  • 57% identify misalignment between investor/funder financial expectations and social mission as the number one reason why finance fails to reach social enterprises.
  • 62% view reporting requirements as an issue, including the burden of data collection and the frequency of reporting.

From surveyed funders and investors:

  • 53% agree that funding readiness as part of investment would be a valuable pathway towards sharing responsibility for enterprise readiness.
  • 40% identify their return expectations as the second factor that explains why their current strategies may exclude grassroots or mission-locked enterprises.
  • 47% consider policy incentives as a key lever to ensure more finance flows to community-embedded models.
  • 47% identify the minimum deal size as the main factor that may exclude grassroots or mission-locked enterprises from their current investment strategies.
  • 53% view collaboration with intermediaries as a practice change that would enable sharing the responsibility of enterprise readiness.

From surveyed policymakers:

  • 60% believe that public procurement preferences and dedicated public funds are two mechanisms that would help redirect finance towards social enterprises.
  • 80% identify tax incentives and guarantees (or co-investment) as effective mechanisms.
  • 80% view participatory funding models as an effective mechanism to strengthen community voice in the process of finance allocation.
  • 60% identify transparency and feedback requirements as an effective mechanism to strengthen community voice in the process of finance allocation.

 

From surveyed supporters:

  • 78% identify flexible finance as the number one missing instrument for social enterprise development.
  • 50% agree that the key ingredient to building readiness and resilience in social enterprises is the flexible use of funds.
  • 40% believe that the key ingredient to building readiness and resilience in social enterprises is long-term accompaniment.

Priorities

Priority 1: Redirect finance

Channel investment to mission-locked, community-led and underserved social enterprises.

Priority 2: Shape suitable finance

Design investment instruments that prioritise long-term social and environmental value creation.

Priority 3: Embed transparency and accountability:

Ensure investment practices are grounded in trust, shared values and accountable to the communities they serve.

Priority 4: Create enabling conditions

Strengthen the policy, governance and support infrastructure required for a thriving social enterprise sector.

Recommendations

#1: Distinguish and prioritise mission-locked models
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  • Recognise and separate mission-locked social enterprises in all investment strategies, policy frameworks and reporting.
  • Design or adopt a solution that takes into consideration the specificities of the social enterprise ecosystem and conduct an assessment of the implementation pathways. 
  •  Advocate for the adoption of clear, principles-based definitions. 

#2: Design and implement blended finance models
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  • Leverage grant funding for increased investability while avoiding grant dependency.
  • Champion patient, flexible finance that works with social enterprises and that aligns with their mission.
  • Focus innovation on financing for scaling as it remains the biggest challenge for social enterprises in most ecosystems. 

 

#3: Build foundational readiness and resilience
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  • Strengthen intermediary capacity as “capital shepherds”, building dialogue and capability on both the demand side and the supply side.
  • Advocate for the funding of investment readiness, whether it is a percentage allocation of an investment deal coming from grant providers or from government.
  • Develop investment readiness tools that protect mission and open multiple pathways to scale.

#4: Activate supportive policy levers
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  • Build trusted relationships over time and advocate across the whole political spectrum. 
  • Advocate for a mix of government policies that either directly reward and incentivise verified social enterprises or mandate investment into mission-locked social enterprises.
  • Develop a sector-based investment portfolio.

#5: Champion community wealth building
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  • Decentralise finance by redirecting investment through local, democratic and participatory community wealth mechanisms.
  • Explore Retail Social Investment to grow inclusive ownership, financing and community wealth. 
  • Experiment with value creation from land and property assets.

#6: Ensure transparent and values-aligned practice
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  • Advocate for the measurement of the full, long-term value that social enterprises create and for the standardisation of impact reporting.
  • Challenge the concept (and reality) of “transparency”. Beyond information sharing, transparency is about accessibility and shared understanding and it requires education.
  • Champion the benefits of trust-based lending over process-driven lending decisions.

#7: Orchestrate system-wide infrastructure design rather than isolated finance infrastructure
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  • Advocate for government to act as an ecosystem enabler rather than a grantmaker.
  • Embed complementarity, coordination and pathways as design principles for new systems-level infrastructure across policy, finance and capability building.  
  • Build new and innovative ecosystem infrastructure.

The scope

The Manifesto draws on consultation with organisations from over 50 countries from across the social finance ecosystem.

The work continues

The Social Investment Manifesto doesn’t stop here. We want to make sure it is heard and implemented, shaping how social finance reaches social enterprises around the world. Share your feedback, start a conversation, or explore how we can work together to bring its recommendations to life.

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