Social impact investments (SIIs)
are those that intentionally aim at social impact
and financial returns. The term SII
is relatively new in the investment panorama, since it was coined in 2007 at the Rockefeller Bellagio Centre in Italy (Harji and Jackson 2012). However, the underlying idea of investing in order to support projects and organizations meeting social needs is well anchored in most of the world’s cultures.
To date, the SII
market is estimated in 114 billion worldwide (Mudaliar et al. 2017) and it is characterized by many actors, generally grouped into supply-side
and demand-side
organizations. Demand-side-organizations
demand funding to support their high-impact activities, while supply-side organizations offer funding to impact-oriented institutions. Instead of this general taxonomy, the SII
market faces differences in terms of types of organizations involved in any country as well as in the development of financial instruments and regulations as recognized by the Social Impact Investment Taskforce (SIIT 2014).
The SIIT (2014) classifies some financial instruments and sub-markets as mature—like the microcredit
market—and emerging—like
social impact bonds (SIBs).
SIBs
have gained the consideration of many public bodies due to their structure based on a public-private
partnership
and on the payment of financial return subordinated to the achievement of the expected
social impact. The pay-for-success approach utilized for
SIBs, has inspired, over the last several years, different and variegated financial impact-oriented financial structures.
This book aims at analyzing case studies of impact investments going beyond
SIBs. With this perspective in mind, the volume firstly recalls literature of
SIIs and some opening points in the architectures of
SIBs; secondly, the book analyzes specific case studies of
public-private
partnerships, of crowdfunding
platforms, and of social impact measurement
models.
The book contains nine chapters structured as follows.
Chapter 2, “Investing with Impact: An Integrated Analysis between Academics and Practitioners” by Rosella Carè and Karen Wendt, introduces the theme of SII
from the scholars’ and practitioners’ perspective. Indeed, the chapter summarizes literature on social impact investments
and assesses what drives
impact investors’ decisions.
Chapter 3, “Social Risk and Financial Returns: Evidences from Social Impact Bonds” by Elisabetta Scognamiglio, Alessandro Rizzello and Helen Chiappini, provides an empirical insight into factors characterizing social risk
of social impact bonds (SIBs)
and explores the correlation between social risk
and financial return by implementing a social risk
score and analyzing a sample of 34
SIBs sharing information publically.
Chapter 4, “The Use of Payment by Results in Healthcare: A Review and Proposal” by Alessandro Rizzello, Rossana Caridà, Anna Rita Trotta, Giuseppe Ferraro and Rosella Carè, aims to clarify opportunities and challenges of the SIB
development in the Italian context, from economic and legal perspectives. This conceptualization is based on literature review and on the assessment of SIBs
in multiple case studies.
Chapter 5, “Impact Investing Innovation: Bringing Together Public, Private, and Third Sectors to Create Greater Value: The Case of the Public Private Partnership Initiative for the New Public Hospital of Treviso” by Filippo Addari, Fiorenza Lipparini and Francesca Medda, describes the Public Private Partnership (PPP) implemented to finance the new hospital in Treviso, Italy and explains how to reach the goal promoters have made recourse to the Shared Value framework developed by Porter and Kramer (2011). This case study represents one of the first cases of large infrastructure realized in Europe within the framework of impact investments.
Chapter 6, “The Evolution of a Social Service Crowdfunding Platform towards an Investing Logic: The Meridonare Case Study” by Carmen Gallucci, Michele Modina and Antonio Minguzzi, analyzes the Meridonare crowdfunding
platform and its features. The chapter proposes a Social Bond Crowdfunding-based (SBCb) model as an innovative financial structure, shifting the role of the
Banco di Napoli Foundation, which created Meridonare, from impact facilitator to impact generator. The new model platform moves from the needs of strengths investment perspectives and from the pay-by-results rewarding mechanism.
Chapter 7, “Benefit-Cost Evaluation of Prevention and Early Intervention Measures for Children and Youth in Sweden” by Lars Hultkrantz, reports on an on-going effort to create a societal benefit-cost model for evaluation of causal effects of social programmes that target individuals and groups in Sweden; the model supports the knowledge of “ex ante” priority decision making and “ex post” follow-up of local interventions funded by municipalities and regional authorities according to an impact investment approach.
Chapter 8, “Impact Measurement for Social Innovation: Analysis of the Spanish Third Sector” by Marta Solórzano-García, Julio Navío-Marco and Mercedes Valcárcel Dueñas, assesses a range of social impact
monitoring and evaluation practices used by organizations working in the Spanish third sector.
Finally, Chap. 9, “Social Impact Investments Beyond Social Impact Bonds: A Research and Policy Agenda” by Helen Chiappini, concludes the book and assesses some research and policy points still open in the impact investment field, like the need for: a hard
and soft
regulation; a transparent governance; reliable social and
financial performance; and the market development.
References
- Harji, K., & Jackson, E. T. (2012). Accelerating impact: Achievements, challenges and what’s next in building the impact investment industry. New York: The Rockefeller Foundation.
- Mudaliar, A., Schiff, H., Bass, R., & Dithrich, H. (2017). Annual impact investor survey 2017. New York: Global Impact Investment Network. https://assets.rockefellerfoundation.org/app/uploads/20120707215852/Accelerating-Impact-Full-Summary.pdf; https://thegiin.org/research/publication/annualsurvey2017.
- Porter, M. E., & Kramer, M. R. (2011). The big idea: Creating shared value – How to reinvent capitalism and unleash a wave of innovation and growth. Harvard Business Review, 89(1–2), 62–77.
- SIIT. (2014). Impact investment: The invisible hearth of markets. London. http://www.socialimpactinvestment.org/reports/Impact%20Investment%20Report%20FINAL%5B3%5D.pdf