Investment readiness and sustainability: Social investment as a third sector policy panacea?

In the UK a neo-liberal policy paradigm centred upon ‘voluntary, community and social enterprise’ (VCSE) organisations has dominated discourse over the last decade, focused upon the marketisation of the third sector as a... [ view full abstract ]

In the UK a neo-liberal policy paradigm centred upon ‘voluntary, community and social enterprise’ (VCSE) organisations has dominated discourse over the last decade, focused upon the marketisation of the third sector as a means to deliver sustainable social value creation within public service delivery. Within this, there has been a strong focus on social investment as a means of increasing the size, scope and sustainability of VCSEs, which has inevitably led to public policy and funding regimes that are centred upon supporting VCSEs to become ‘investment ready’. However, this ignores the fact that many VCSEs do not wish (or are not capable) of securing social investment, and that such an approach is not always the best way for them to achieve growth and scale. This conflict between the aims of policy-makers and the apparent needs of practitioners has important implications for the culture and context created within policy discourse by dominant narratives. The nascent state of these policy discourses globally has meant that there is limited research and data on the efficacy of such interventions, which makes the robust assessment of their impact imperative both for academic and policy stakeholders.

This paper seeks to explore this dichotomy between policy and practice through data gathered within a mixed-methods research study. The research involves data gathered within a UK based fund that is delivered through a partnership of private, public and third sector organisations, and that seeks to enhance the investment readiness of the VCSE sector in order to create social investment ‘deal flow’. The research aimed to explore the efficacy of the investment readiness programme and assess the outcomes for the VCSEs that engaged with it. The quantitative data includes organisational demographic data gathered from 760 VCSEs based in England, whilst the qualitative data involves 22 semi-structured interviews gathered from key stakeholders in the sector (VCSEs; Support Providers; Investors; Policy-makers; and experts). The results suggest that there is a lack of need for social investment in the third sector and that therefore marketisation policies are misplaced. Indeed, of the 126 VCSEs that have fully completed their investment readiness journey through the programme to date, only 4 have so far proceeded to secure social investment. The paper argues that such neo-liberal policy focus on unitary methods of enhancing sustainability (social investment) are misplaced, and that wider efforts to enhance sustainability within the third sector are required over and above a focus on social investment. These findings have important implications for academics, public/private/third sector practitioners, and policy-makers both in the UK and globally.