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Enabling Social Innovation through Developmental Social Finance

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  • Sean Geobey
  • Frances R. Westley
  • Olaf Weber

Abstract

This paper explores social finance as a strategy for generating social innovations and, at the same time, financial returns. It explores why risk assessment for social finance is so challenging and suggests three sources of difficulty: setting boundaries, integrating heterogeneous values, and responding with sufficient speed and flexibility to support innovation. It suggests links between the seemingly distinct challenges of social finance being able to maximize its impact at different stages of the innovation process in a complex socio-ecological system, whilst also acting as a reframing agent in terms of the understanding of the system itself at other stages. Finally, this paper develops a new concept ‘developmental impact investing’ as a modified version of a portfolio strategy that uses a range of projects both to manage risk and to generate new knowledge about the complex systems in which the social finance attempts to create impact and innovation.

Suggested Citation

  • Sean Geobey & Frances R. Westley & Olaf Weber, 2012. "Enabling Social Innovation through Developmental Social Finance," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 3(2), pages 151-165, October.
    • Handle: RePEc:taf:jsocen:v:3:y:2012:i:2:p:151-165
    DOI: 10.1080/19420676.2012.726006
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    References listed on IDEAS

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    1. Antony Bugg-Levine & Jed Emerson, 2011. "Impact Investing: Transforming How We Make Money while Making a Difference," Innovations: Technology, Governance, Globalization, MIT Press, vol. 6(3), pages 9-18, July.
    2. Alnoor Ebrahim & V. Kasturi Rangan, 2010. "The Limits of Nonprofit Impact: A Contingency Framework For Measuring Social Performance," Harvard Business School Working Papers 10-099, Harvard Business School.
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    Cited by:

    1. Syrus M. Islam & Ahsan Habib, 2024. "How impact investing firms use reference frameworks to manage their impact performance: An industry‐level study," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(1), pages 161-184, March.
    2. Rosangela Feola & Massimiliano Vesci & Ezio Marinato & Roberto Parente, 2021. "Segmenting “digital investors”: evidence from the Italian equity crowdfunding market," Small Business Economics, Springer, vol. 56(3), pages 1235-1250, February.
    3. Ozili Peterson K., 2021. "Digital Finance, Green Finance and Social Finance: Is there a Link?," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 17(1), pages 1-7, March.
    4. Laura Toschi & Elisa Ughetto & Andrea Fronzetti Colladon, 2023. "The identity of social impact venture capitalists: exploring social linguistic positioning and linguistic distinctiveness through text mining," Small Business Economics, Springer, vol. 60(3), pages 1249-1280, March.
    5. Thomas André, 2015. "Managing Societal Performance of Impact Investing: An Action Research Inquiry," Working Papers hal-01211725, HAL.
    6. Faraudello Alessandra & Barreca Manuela & Iannaci Daniel & Lanzara Federica, 2021. "The Impact of Social Enterprises: A Bibliometric Analysis From 1991 to 2020," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 421-434, May.
    7. Paul Langley & Andrew Leyshon, 2017. "Capitalizing on the crowd: The monetary and financial ecologies of crowdfunding," Environment and Planning A, , vol. 49(5), pages 1019-1039, May.
    8. Syrus M. Islam, 2022. "Impact investing in social sector organisations: a systematic review and research agenda," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 709-737, March.
    9. Bill Slee & Robert Lukesch & Elisa Ravazzoli, 2022. "Social Innovation: The Promise and the Reality in Marginalised Rural Areas in Europe," World, MDPI, vol. 3(2), pages 1-23, April.
    10. David B. Audretsch & Georg M. Eichler & Erich J. Schwarz, 2022. "Emerging needs of social innovators and social innovation ecosystems," International Entrepreneurship and Management Journal, Springer, vol. 18(1), pages 217-254, March.
    11. Scognamiglio, Elisabetta & Di Lorenzo, Emilia & Sibillo, Marilena & Trotta, Annarita, 2019. "Social uncertainty evaluation in Social Impact Bonds: Review and framework," Research in International Business and Finance, Elsevier, vol. 47(C), pages 40-56.
    12. Paweł Mikołajczak, 2023. "Comparative study of social impact bonds – capital per beneficiary and scheme duration," Bank i Kredyt, Narodowy Bank Polski, vol. 54(2), pages 191-220.
    13. Christian Omobhude & Shih-Hsin Chen, 2019. "Social Innovation for Sustainability: The Case of Oil Producing Communities in the Niger Delta region," Sustainability, MDPI, vol. 11(23), pages 1-26, November.
    14. Thomas André, 2015. "Institutionalization Of Impact Investing Through Societal Management Pressures: An Action Research Inquiry," Working Papers hal-01180070, HAL.
    15. Shome, Samik & Hassan, M. Kabir & Verma, Sushma & Panigrahi, Tushar Ranjan, 2023. "Impact investment for sustainable development: A bibliometric analysis," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 770-800.
    16. Mario La Torre & Helen Chiappini (ed.), 2020. "Contemporary Issues in Sustainable Finance," Palgrave Studies in Impact Finance, Palgrave Macmillan, number 978-3-030-40248-8, February.
    17. Tania Pereira Christopoulos & Pedro Verga Matos & Rafael Drumond Borges, 2024. "An Ecosystem for Social Entrepreneurship and Innovation: How the State Integrates Actors for Developing Impact Investing in Portugal," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7968-7992, June.
    18. Brandstetter Lisa & Lehner Othmar M., 2015. "Opening the Market for Impact Investments: The Need for Adapted Portfolio Tools," Entrepreneurship Research Journal, De Gruyter, vol. 5(2), pages 87-107, April.
    19. Miguel Ángel Martín Valmayor & Beatriz Duarte Monedero & Luis A. Gil-Alana, 2021. "The Social Balance Sheet as Part of the Annual Report in Financial Institutions. A Case Study: Banco Bilbao Vizcaya Argentaria (BBVA)," Sustainability, MDPI, vol. 13(6), pages 1-14, March.
    20. Shah Muhammad Kamran & Abdelmohsen A. Nassani & Muhammad Moinuddin Qazi Abro & Mahvish Kanwal Khaskhely & Mohamed Haffar, 2023. "Government as a Facilitator versus Inhibitor of Social Entrepreneurship in Times of Public Health Emergencies," IJERPH, MDPI, vol. 20(6), pages 1-18, March.
    21. Saka-Helmhout, Ayse & Álamos-Concha, Priscilla & Polo-Barceló, Carlos & Edwards, Tony & Murray, Gregor, 2024. "Corporate social innovation by multinationals: A framework for future research," International Business Review, Elsevier, vol. 33(5).
    22. Akbar, Syed Waqar & Rehman, Ajid Ur & Bouri, Elie & Ijaz, Muhammad Shahzad & Arshad, Imran, 2024. "Socio-economic issues and bank stability: The moderating role of competition," Research in International Business and Finance, Elsevier, vol. 71(C).
    23. Bridget M Horel & Kevin McKague, 2018. "Community Contribution Companies and Access to Social Finance," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 11(5), pages 126-126, September.
    24. Thomas Wainwright & Graham Manville, 2017. "Financialization and the third sector: Innovation in social housing bond markets," Environment and Planning A, , vol. 49(4), pages 819-838, April.
    25. Paul Langley, 2020. "The folds of social finance: Making markets, remaking the social," Environment and Planning A, , vol. 52(1), pages 130-147, February.

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