As a civil servant by trade (and an Englishman!) I am uncomfortable with sharing my personal view in public on what’s right and wrong, morals and politics, how things should be and what would make the world a better place. Rather, I prefer to apply myself to diligently picking patterns out of noise, illuminating dark corners, challenging fuzzy logic, recognising vested interests, highlighting contradictions and digging out details which others may have missed. 

So when I conclude that something is wrong in the social investment world, I don’t mean that I disagree with the way the market is headed. What I want to see is immaterial. But the evidence does seem to suggest that an unspoken, unresolved and problematic tension could be about to tear at the heart of the market. I fear that if this nagging tension isn’t resolved then the credibility, strength and potential of an industry which many people want to see thrive could be tragically undermined.

So what’s wrong?

Let’s start with what is right. Allia’s model of charitable bonds have a sound track record and are widely respected. Customers putting money in a deposit account with Charity Bank, Triodos, a community development finance institution or credit union for these funds to be invested with a regard to social impact are well established examples of social investment in action. Communities coming together to invest in their local football club, village shop, pub, post office or renewable energy project offer increasing evidence of the potential of this school of investment.

Yet each of these models have one thing in common – the investor isn't looking to get more than their money back. In fact, in some of these examples, they may not even get it back.

Yet the Government, the much heralded Big Society Capital and other big investors are proclaiming that social investment must deliver financial return. The Boston Consulting Group say that “there must be some expectation on the part of the social investor that they will be able to get their money back with a return.” Some social investors are turning down proposals on the basis that they don’t offer “strong enough financial return”.

So something is wrong here.

Of course there is no unifying definition of social investment – it’s always been fuzzy. For some, it’s about the investee – any investment in a social venture can be defined as social investment. For some, it’s about the motivation of the investor and the impact they seek, regardless of the investee. And for others, it’s both – socially motivated investment in a social venture.

For some, the social returns must come in tandem with an intention to deliver financial return. For some, a degree of financial return should be surrendered. And for others, it’s always been about investment more widely to achieve a future social benefit and a wide spectrum of financial return (but crucially not revenue, income or funding).

But how did this happen that one narrative has come to dominate? And problematically, that the soul of social investment has been seized by a definition which discredits some of our most popular, established and well understood models? Is it - as Bonnie Wong suggests - that “investors and financiers are smart. When they see an opportunity to exploit and make money, they will command the conversation”?