Resonance - Twenty Years Of Impact - Report - Page 99
A FINAL WORD FROM DANIEL
Was it what I envisioned?
The last twenty years have certainly been an
adventure. Looking back, was it what I had
envisioned? Well - yes and no.
WE’RE HERE
TO SEE LIVES
TRANSFORMED
I did think it was possible to build an impact
investment fund... though I probably thought
Resonance would just build one, that could invest in
whatever it wanted. I definitely thought it was going
to be an easier journey. I remember being shocked
at the cynicism from charity CEOs and the disbelief
from investors that you could mix social and financial
goals with integrity. I’ve always seen it in reverse...
where’s the integrity, without acknowledging the
connection between the two? Despite the loneliness
of being an entrepreneur I gradually found others
that also sensed the investment world needed a
reboot: Key Fund, Social Investment Business,
Bridges Ventures, Venturesome, the Ethical Property
Company, Charity Bank –in various ways, all pioneers
of impact investment, and all started around the same
time as Resonance. First there is arrogant suspicion
that someone else has copied your idea, followed by
the deflating sense that you’re not doing something
that unique after all. And then there’s the relief that
you are not on your own and the realisation we’re
much more likely to make a difference together, and
ultimately the discovery that impact investing had in
fact been pioneered centuries ago. All we had done
was rediscover it and given it a new name. It was the
challenge and comradery of these colleagues that
spurred me on, especially on days it felt like pushing
water up hill.
UK pioneers blazed a trail for the world
It wasn’t until the Japanese government invited me
to share the UK impact investment story, ahead of
their dormant bank account legislation, that I realised
how much the UK pioneers were blazing a trail for the
whole world. Neither had I recognised how privileged
we were to have such a healthy ecosystem including:
• Legal structures for different types of social
enterprise including the Community Interest
Company, conceived and designed by Stephen
Lloyd and colleagues at Bates Wells, stewarded and
championed into its useful form by CIC regulator
Sara Burgess.
• The first investment tax relief for social investment
introduced by Gordon Brown following leadership
by Sir Ronnie Cohen, through his chairing of the
Social Investment Task Force 2000-2010.
People remain our purpose
Resonance is a BSC success story, one of BSC’s first
investments and now managing more of their money
than anyone else. But as we’ve just about reached
their 10% threshold for any one manager, we are
looking to bigger pools of capital. Growth per se is not
a goal of ours, except for when it makes a difference to
people’s lives. And the societal challenges ahead of us
remain stubbornly large.
Capital serving people and communities has always
been at Resonance’s heart. It’s the overarching
definition of how we envisage the future. We’re not
here to seek our own comfortable existence, but
to see lives transformed. If mobilising investment
capital can achieve this - by no means a panacea - we
are poised and ready to see it safely and sustainably
put into the hands of social enterprises. Profit is a
necessary side effect of a successful enterprise, but
people remain the purpose.
I’m still impatient
As we look forward to the next twenty years, I remain
optimistic but still impatient. The 100,000 families in
temporary accommodation, the 2,000 people with
learning disability living in hospitals, the two women
a week that are killed by partners - these are the
people we’re dedicated to - investing in life changing
homes and solutions for people facing crisis. Our
ambition to grow to our first billion pounds of funds
under management is premised not on some ego trip
to achieve an arbitrary goal, but on the belief that it
might begin to make a dent in issues that matter.
However, I’m determined that we’ll not only buy
and build safe, affordable healthy homes, but we
will also harness the power of technology to begin
to value with financial alignment the journey away
from crisis for the tenants we collectively serve. A
friend once explained to me that you can’t rescue
people, only create space and opportunity. The real
impact we enable is achieved mainly by the tenants
themselves. Wouldn’t it be amazing if we could align
our economic and carbon interests around the steps
they take towards a life where they can truly thrive
independent of us?
There is much to do but we are in great company and
gradually those with power and resource are sharing
our vision of a world where capital truly serves people
and communities. Money is not a prize, it’s a tool.
Let’s use it well!
My prediction for the next twenty years
in impact investing
So how will impact investing look like in another
twenty years?
1.Impact investing will become the predominant
form of investing. I genuinely think that once
people see it’s possible to generate sustainable
financial returns from backing enterprises serving
a thriving, inclusive society, it’s hard not to want to
do more. Of course, there will be grades of impact,
but even those wolves in sheep’s clothing are in
danger of becoming vegetarians once they have to
get a taste for it (apologies for metaphor mixing).
I think asset owners will move from allocating 2-5%
of their resources for impact to 50%+.
2.There will be a shift from impact reporting and
attribution, where the patronising tendencies in
us are desperate to claim credit treating social
change as a kind of toxic transaction to be traded.
Instead, focus will be on alignment of participants
– investors, managers, social entrepreneurs, people
supported - recognising they are all beneficiaries.
It’s an equivalent shift to the one we are making
from linear to circular. We will still need to collect
data and share it transparently, but it won’t be a
one-way flow.
3.Asset owners will focus as much on culture of the
firms they entrust their money to, as the business
strength. It is frequently claimed that ‘culture eats
strategy for breakfast’ and yet investment decisions
and due diligence predominantly ignores the
character of people, relying instead on contractual
management of mistrust. I admit it’s a little utopic,
but real impact investment expects that you allow
yourself to be part of the transformation process.
Some of this feels naïve as we face climate
breakdown, threats of nuclear war and global food
shortages whilst emerging from the worst global
pandemic in a century. It is a lot for us to shoulder,
but I’m inspired by the refugees fleeing conflict,
demonstrating unreasonable levels of dignity. If they
can do it, what excuse have we not to try?
DANIEL
• Big Society Capital – the world’s first social
investment wholesaler originally envisioned by Sir
Ronnie Cohen (again) through the Commission
on Unclaimed Assets 2005-2007 - made possible
under successive governments, and a reality thanks
to leadership from Nick Hurd and Nick O’Donohoe.
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