Social Impact Investing

This publication provides a framework for assessing the social impact investment market and focuses on the need to build the evidence base. It highlights the importance of further international collaborations in developing global standards on definitions, data collection, impact measurement and evaluation of policies. In a fast-evolving new area, experience sharing between players in the market is also vital. International organisations such as the OECD can play an important role in facilitating these collaborations as well as conducting further analysis and data collection.

Social Impact Investment can potentially provide new innovative ways to more efficiently and effectively allocate public and private capital to address social and economic challenges at the global, national and local levels. While these new approaches will not replace the core role of the public sector or the need for philanthropy, they can provide models for leveraging existing capital using market-based approaches with potential to have greater impact. SII can also catalyse additional capital flows into developing economies, critical to the current high-level dialogue on Financing for Development and the development of the new Sustainable Development Goals.

The market is evolving in various ways across countries. This is influenced by the differences in the country context including history, social needs and value systems. In addition, the ways in which social and financial systems are structured will determine the role and mix of public and private capital and therefore the potential role of SII. The variation in these contexts can provide indications in terms of which SII approaches may be more appropriate in some sectors than in others, and easier to implement in some countries than in others.