CompareThe(SocialInvestment)Market.com

CompareThe(SocialInvestment)Market.com

Developing a Social Investment Performance Data Exchange. The Connect Fund supported Social Enterprise UK to explore how data sharing can be made more transparent across the social investment market. Their Deputy CEO, Charlie Wigglesworth, explains what is needed to make this work.  

Data transparency and open data sources have transformed our lives in so many ways. From finding a cheap train ticket to getting a mortgage, our ability to understand markets and find a good deal has improved significantly. Price comparison websites (usually!) provide instant access, transparency and responsiveness to the best opportunities.

Unfortunately, in the social investment market this isn’t the case – many long term social investors struggle under the weight of multiple legacy systems from bureaucratic government funds, or have never sought to publish data on their investments. This has long been seen as an issue – back in 2013 the Angels in the Architecture report on infrastructure for social investment described data as “essential to the operation of established financial markets” and that this includes “platforms which centralise data and standardise procedures”.

For Social Enterprise UK, transparency for our members, and their ability to make informed decisions on which fund or product is right for them, is absolutely critical. Equally however, it’s important that investors themselves see value in this. To do that, we teamed up with three long term investors (Key Fund, Social Investment Business and CAF Venturesome) to further investigate how we take this forward.

We quickly identified that previous attempts to create an open data platform have let the perfect get in the way of the good, by trying to achieve everything and so ultimately not progressing as much as they might. Transparency only works if everyone in the market buys into it, so we had to think from the investor perspective about what would make it work for them. We identified some key areas that we think would help make open data sharing work:

  1. Making it forward looking – it would be great if we could open up all historical data, but this presents significant challenges (and costs!) so let’s focus on doing it for all new funds moving forward
  2. Making it make business sense – demonstrate the business case both for investors (how this will drive better outcomes for them) and for their customers (charities and social enterprises).
  3. Dealing with the practicalities – encourage investors to use machine readable platforms (many are currently looking into Salesforce) that store data in a way that makes it easy to open up. And develop a clear, core set of taxonomies so that we’re using standard terms around impact.

By working in this way, we’ll start to build a broader consensus and appetite amongst investors to engage, seeing the opportunity rather than the risks and costs. The next step is to work across the investment sector to get as many investors as we can signed up and committed to taking this forward. We’re also keen to hear from anyone working with the social investment market on any of the above areas.

Developing an open data platform will certainly represent a significant challenge. However, the opportunity is too great not to pursue given the potential impact it can have on the social investment market, individual social investors, and most importantly for charities and social enterprises seeking investment.

Charlie Wigglesworth, Deputy CEO, Social Enterprise UK

@SocialEnt_UK