The Beacon Collaborative Beacon releases two reports mapping the path to growth
In a week when Beacon was involved in the launch of two reports, a pertinent comment from one of Beacon’s close friends came to mind: “Do we need all these reports being produced by the philanthropy and social investment sectors? Is this a good use of philanthropic resource? Don’t we really need more action?”
These are fair points, especially as the mission of many of the organisations producing these reports is “to increase philanthropy and social investment by….doing something”.
While one could dismiss it as a post-Covid flurry, however, I would argue there is something more significant happening here.
R&D matters
In 2019, the public and private sectors in the UK spent £38.5 billion on research and development, or 1.7% of GDP.
R&D is usually defined as “…creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge.”
Furthering humankind might be in the definition, but this is no philanthropic act. R&D drives innovation and it drives value – so much so, the government has set a target that 2.4% of total GDP should be spent on R&D by 2027.
If the philanthropy sector were going toe-to-toe with the public and private sectors, even on current spend there would be £85 million spent per year on R&D to support the estimated £5 billion of philanthropic value annually contributed to public benefit organisations.
Now there’s a thought.
While the philanthropy and social investment sectors have an excellent track record on bootstrapping innovation, it is hard not to think of Henry Kissinger’s most famous plagiarism: “If you don’t know where you are going, every road will get you nowhere.”
Research identifies opportunity, it de-risks action and it enables progress to be measured.
If there is a common goal, there must also be one agreed critical path
In the absence of deep R&D budgets, the philanthropy and social investment sectors have become adept at sharing.
Knowledge, ideas and insights have been shared and woven through a number of recent reports, in many cases intentionally, as different organisations build on earlier work.
If each iteration drives cohesion around a common agenda, this is not duplication but an increasingly refined analysis of the critical path toward a shared goal.
If each organisation brings a different perspective and a fresh set of insights, this enriches the map and helps to chart the best route through tricky terrain.
Without advocacy, we are nowhere
Philanthropy occupies a space that sits between the public and private spheres. It, therefore, relies on actions from both sides in order to thrive.
Philanthropy and social investment will only grow when policymakers are clear about their role in the public agenda and when regulators provide a targeted framework, thus enabling private sector players, as well as the charity, philanthropy and social investment sectors themselves, to professionalise their support for end donors and investors.
This value chain isn’t functioning well in the UK.
In the absence of a clear narrative on the role of philanthropy and social investment from the government, and with regulators unable to provide targeted guidance for socially-driven action, private sector providers are left in the unsustainable position of trying to drive donor engagement through meaningful experiences in an incoherent marketplace.
To grow philanthropy and social investment, we need policies from the government that can enable the work of the sector.
Policymakers are more likely to champion the needs of the philanthropy and social investment sectors if they can offer refined, evidence-based, and agreed proposals. This kind of high-quality advocacy requires a shared platform of research.
Unlocking private assets for public benefit
With this preamble, it will come as no surprise that the reports we launched last week included vital contributions from partners across the philanthropy and social investment sectors.
Unlocking Private Assets for Impact is a summary of the work of the 12-month Individual Impact Investing Commission, which was co-led by the Beacon Collaborative and Big Society Capital.
Eleven commissioners, representing investors, impact investment firms and sector organisations, shone a forensic light on the barriers that prevent more private individuals from putting their capital to work in impact investment opportunities.
The report puts the needs of high-net-worth investors in the context of the wider growth and development of the impact investing sector. It concludes that private capital flows are being choked at source due to a lack of effective intermediation between opportunities and investors.
This partly reflects the lack of maturity in the impact investment marketplace, and partly the lack of responsiveness among wealth advisers to support their clients to invest across the values-based spectrum.
It makes 12 recommendations, supported by a detailed action plan, showing how different actors within the sector can contribute to change.
During the same week, the All-Party Parliamentary Group held its second meeting in Westminster to launch Unleashing the Potential of Philanthropy and Social Investment.
The report offers a 10-point plan setting out how government can help the philanthropy and social investment sectors to be more effective.
This action plan is based on insights and recommendations from organisations across both sectors. It highlights the essential role that government needs to play in order to enable more private capital to flow toward social impact.
Outlining a common agenda, highlighting innovation and advocating for government support, these reports aim to encourage all those with the capacity to drive change to play their part in unlocking more private assets for public benefit in the UK.
We, therefore, invite any colleagues to take forward the ideas outlined in these reports and to share with us actions they are already undertaking on these themes.
At its best, philanthropy is a shared endeavour. Growing philanthropy too will be an act of partnership, driven by a common goal and shared understanding.
Download:
Unlocking Private Assets for Impact
Unleashing the Potential of Philanthropy and Social Investment