Social finance

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Social finance is an approach to managing money which delivers a social dividend and an economic return.

Social finance is often used to describe the lending and investment into companies who consider themselves social enterprises, charities, co-operatives, and other impact-focused organisations. The term can include community investing, microfinance, investing in socially-responsible and sustainable businesses, social impact bonds, and social enterprise lending. Outcome-based philanthropic grantmaking and program-related investments, sometimes referred to as venture philanthropy, also fall under the umbrella of social finance. A social investment loan is not a grant or donation; it’s repayable, often with interest.[1]

These approaches to investment and funding share the twin focus of stimulating positive social and environmental returns for investors and the larger world. Some social investors try to effect environmental return, which is referred to as a regard for a triple bottom line. Similarly, it can be seen as 3D investing, which accounts for risk, return and impact for consideration by investors.

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