This report explores how banks can use their core strengths -- financial acumen, investment skills, capital and networks -- to actively generate social impact by engaging in venture philanthropy and social investment. Venture philanthropy (VP) and social investment (SI) are philanthropic and investment tools to create more resilient and stronger social purpose organizations able to generate greater social impact. Concretely it means investing (money and management skills) in social enterprises, non-profit organisations and charities so that they can do their job better.
The report seeks to show the full range of VP and social investment initiatives and activities by banks based in Europe, whilst being particularly interested in those that have an engaged investment or venturing dimension. Furthermore, we selected cases that would illustrate a diversity of approaches. At this point in the evolution there are already several pioneering initiatives and exciting stories to share about what can be done by banks in this field. The objectives of the report are:
- To create wider knowledge of how banks in Europe are currently creating social impact through VP and social investment
- To share best practice examples and lessons from banks in Europe pioneering VP and social investment
- To provide practical recommendations and an overview of different strategies for banks engaging in VP and social investment
- To catalyse greater (financial and human capital) investment in VP and social investment initiatives across the banking sector in Europe
This report explores the different strategies banks can adopt in order to increase their positive impact on society, and focuses specifically on strategies that have a primary social impact objective as opposed to investments that aim to maximize financial returns by investing in industries that may have social and/or environmental benefits (e.g. cleantech). As such, the report does not explicitly address those impact investing strategies that aim to generate a financial return first, and where the social impact is a positive side-effect rather than the primary objective. The general term impact investing is frequently used by the banks and often used interchangeably with social investment.
The report was developed with key input from interviews with both executives at banks as well as with other experts on the VP/social investment sector. The interviews were complemented with extensive desk research using external publications, banks' websites and banks' external reports. We are deeply grateful to the people that took time to contribute their ideas and knowledge to this report. A list of sources can be found at the end of the publication.