Sophia Hubs Director Aidan ward explains about social investment…
The concept of investment has changed a lot over the years. If you watch films of the Victorian era there is often a sense of risk and adventure around investing money in some great scheme. An investor may have wanted and expected to make large amounts of money from their investment, but may also have been passionate about a new railroad, a clever invention, a trading venture. The investment is partly about money and partly about ushering in the future.
Since then investment has been through the usual commodification. You can easily buy shares in a unit trust so that the underlying investments are diversified and the risk to your money, notionally at least, is lowered. This type of investment is really only about getting a return at low risk, a way of getting your money to grow. What has happened is that the adventure is gone and you have very little idea of the effect of your investment out there in the wide world.
Perhaps from there the notion arose of responsible investment. Maybe investors should care if their money was used to make armaments, cigarettes, or was very harmful to the environment, like a coal mine. So the notion is a negative one: I want to make a good return on my investment without wrecking societies or the planet.
Social impact investment makes the positive case. An investor might say that he was relaxed about getting a return on his money and that he wanted to do something worthwhile with his money. The investment emphasis goes back to the scheme, to the excitement about what can happen. A social impact investor will typically think quite hard about the sort of social impact she wants to see created, and then see whether she believes a particular project will have that impact. Some investors care so much about a project they don’t care a lot even if they lose some of their money.
Social impact investment is not the same thing as giving to charity. It has a tougher feel to it. Real money is being put at risk, and the project invested in has to make the money work really hard. The project has itself to generate a return so that investors can be repaid.
A community share offer is a special case of social investment. People can take out shares in something that is designed to benefit the community. Investing money in your own community is much like volunteering your time for some community purpose. Some people find it easier to invest time and some would rather make their money work for the community rather than the bank!
And invites you to our launch event in the City of London on Tuesday 17th November
It is the official launch of Sophia Hubs Ltd and is also the launch of our community share offer. We are bringing together friends and contacts in social projects and from our Redbridge hub alongside City financiers and interested folk. The event is part of a series of events on philanthropy in the City.
Please do come and hear about the start up businesses we have been supporting in Redbridge and about our work to build up the sharing and money economy. And see if you want to invest in exciting social enterprises and start-up businesses serving their community.
Aidan Ward, Sophia Hubs Ltd Director.