Report on Social Finance in Guernsey published
The Guernsey Community Foundation has published new research on Social Finance and its application to Guernsey.
Social Finance is a relatively new form of funding for initiatives which have a social benefit as well as a financial return. It was pioneered in the UK, where a wide range of projects are now funded by different forms of Social Finance, and is increasingly being used elsewhere, including the USA.
The report shows that Social Finance is already alive and well in Guernsey, having been used in various ways to fund projects from the new Cobo Community Centre to the island’s social housing developments. It highlights new opportunities for the future, but emphasises that further work would be needed - with clear leadership from the States – if Guernsey wanted to get the most out of social investment.
The recent Supported Living & Ageing Well Strategy, and the Children & Young People’s Plan, both indicate the need to understand the role of Social Finance in the future. The publication of the report is therefore timely in providing a common framework for discussions, and in helping to move the conversation forward.
Wayne Bulpitt, Chair of the Guernsey Community Foundation, said that the report was intended to shed light on what Social Finance is and when it should be used:
“There is a growing interest in Social Finance locally, with a number of different conversations underway about how it might be used. We wanted to commission a report that would act as a benchmark and a reference document for people interested in exploring how Social Finance might apply to Guernsey over the coming months and years, whether they are community organisations working on projects that lend themselves to social financing; investors seeking to use their resources to make a positive difference in the community; or policy-makers exploring social investment as a way to fund service expansion and innovation.”
The report recognises that many community projects will still be better suited to traditional charitable or government funding, and acknowledges the challenges which have been faced in other places with more complex forms of Social Finance. But it also considers the added value which Social Finance can bring to the right kind of projects. Examples explored in the report include digital health and re-enablement services, and community banking.
Mr Bulpitt added:
“The Foundation is committed to supporting a vibrant, caring local community through the effective use of money, time and ideas. It seemed only right that we should explore Social Finance – not as a replacement for philanthropy or commissioning, but as an opportunity to unlock a new kind of funding to promote innovative solutions to social challenges. Even where organisations are not directly seeking social investment, there is a lot that can be gained from applying the principles and rigour of Social Finance to the way that services are run, managed and commissioned.”
The Foundation sets out three main messages for anyone interested in exploring Social Finance, whether voluntary organisations, private investors or policy-makers:
- The disciplines of Social Finance are beneficial, even for organisations which don’t seek direct social investment. In order to take on Social Finance, organisations must have clearly-defined goals, make good use of data and management information, and have robust internal governance and processes – all of which are helpful to any organisation seeking to provide services or to understand its own impact.
- Financing should always be proportionate and appropriate to the specific project – this is true for Social Finance, where different financing options have different levels of complexity; but it is equally true for other forms of funding community initiatives, such as government grants and contracts.
- Further cooperation between the public, private and voluntary sectors would help to determine the best use of Social Finance in Guernsey. Public sector leadership is especially important in light of the States’ commitment to public sector reform, which shares many principles in common with social investment.