Abstract
With the global financial and economic crisis as a backdrop, we argue that social investment presents an innovative option with considerable potential. Social investment approaches break conventional boundaries that limit investment either to the world of business or, as public investments, to governments. Rather, social investments turn out to be a third option for policy makers, as they combine the economic and the social, the private and the public. Introducing the key models and tools of social investment, the chapter offers examples of social investments in France and Germany. It finds major deficiencies in how such investments are seen and encouraged, and laments the lack of an enabling framework. In conclusion, the chapter makes a plea for international social investment markets, especially at the European level.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
For a detailed discussion of various conceptualizations and approaches to social investment see Anheier et al. (2012).
- 2.
Emerson (2003) makes a similar point for grant-making foundations: Their purpose is to invest in the creation of social value, i.e., a value other than monetary gains and redistribution.
- 3.
Cooch and Kramer (2007) offer a similar typology and differentiate between conventional investments, based on financial objectives exclusively, and grants, based on charitable objectives. Program-related investments are located in between these two extremes. The latter are grouped into two subtypes: market-rate mission investments and below-market rate mission investments.
- 4.
Kramer and Cooch (2006, p. 16) suggest four PSI categories:
-
Private equity and venture capital that can support start-up organizations (either for profit or nonprofit) through debt or equity investments.
-
Loans and mezzanine capital that offer loans to nonprofit organizations, loans with or without equity participation to privately held for profit companies, and (typically) microfinance loans to individuals; mezzanine forms of capital combine external capital without voting rights with own assets.
-
Loan guarantees that secure loans or bond issues and lower the cost of capital to be borrowed by either for-profit or nonprofit corporations; they can also increase access to capital markets.
-
Bonds and deposits, including mortgage-backed securities, community development bond offerings, and (in the USA) certificates of deposit at community development financial institutions.
-
- 5.
France Active and the Association pour le Droit à l’Initiative (ADIE) are nonprofits that help direct unemployed individuals in France with microfinance loans and advice into self-employment (see http://www.franceactive.org and http://www.adie.org).The Solidarité Internationale pour le Développement et l’Investissement (International Solidarity for Development and Investment, or SIDI) specializes in financial and technical support for microfinance institutions in developing countries (see http://www.sidi.fr).
- 6.
For example, in public policy, educational expenditures are typically classified as current costs or expense in annual budget but not as investments; similarly, allocation for the restoration of the environmentally degraded areas are seen as expenditures rather than investments.
References
Anheier, H. K., Schröer, A., & Then, V. (Eds.). (2012). Soziale Investitionen. Wiesbaden: Sigma.
Association pour le Droit à l’Initiative (ADIE). (2013). http://www.adie.org. Accessed 3 Aug. 2013.
Ashoka Deutschland. (2013). http://germany.ashoka.org/%C3%BCber-uns. Accessed 3 Aug 2013.
Bolton, M. (2005). Foundations and social investment in Europe. Survey Report. Brussels: European Foundation Centre.
Bonventure. (2013). http://www.bonventure.de/en/aboutus.html. Accessed 3 Aug. 2013.
Charity Commission. (2013). http://www.charity-commission.gov.uk/supportingcharities/casi.asp. Accessed 3 Aug. 2013.
Cooch, S., & Kramer, M. (2007). Aggregating Impact: A Funder’s Guide to Mission Investment Intermediaries. Boston: Foundation Strategy Group
Dialog im Dunkeln. (2013). http://www.dialog-im-dunkeln.de/NEW2011/start.php. Accessed 3 Aug. 2013.
ElektrizitätsWerke Schönau. (2013). http://www.ews-schoenau.de/ews.html. Accessed 3 Aug. 2013.
Emerson, J. (2003). The blended value map: Tracking the intersects and opportunities of economic, social and environmental value creation. http://www.hewlett.org/uploads/files/BlendedValueMapFinal.pdf. Accessed 3 Aug. 2013.
Epargne Solidaire. (2013). http://www.epargne-solidaire.com. Accessed 3 Aug. 2013.
Esmee Fairbairn Foundation. (2005). Foundations and social investment: Making money work harder in order to achieve more. London: Esmee Fairbairn Foundation.
European Parliament. (2009). Question hour with the President of the commission. Strasbourg, 20.10.2009. http://www.europarl.europa.eu/sides/getDoc.do?type=CRE&reference=20091020&secondRef=ITEM-011&format=XML&language=EN. Accessed 3 Aug. 2013.
European Social Fund. (2013). http://ec.europa.eu/esf/home.jsp. Accessed 3 Aug. 2013.
European Sustainable Investment Forum. (2013) www.eurosif.org. Accessed 3 Aug. 2013.
France Active. (2013). http://www.franceactive.org. Accessed 3 Aug. 2013.
Grameen Danone Ltd. (2013). http://www.danonecommunities.com/project/grameen-danone-foods-ltd. Accessed 3 Aug. 2013.
International Solidarity for Development and Investment (SIDI). (2013). http://www.sidi.fr. Accessed 3 Aug. 2013.
Kramer, M. R., & Cooch, S. (2006). Investing for impact: Managing and measuring proactive social investment. Boston: Foundation Strategy Group/Shell Foundation.
Reinhart, C. M., & Rogoff, K. S. (2009). This time is different: Eight centuries of financial folly. Princeton: Princeton University Press.
Urgeghe, L. (2011). Les véhicules d’investissement en microfinance et le défi de la performance sociale. Mondes en développement, 4, 69–82.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2014 Springer Science+Business Media New York
About this chapter
Cite this chapter
Anheier, H., Archambault, E. (2014). Social Investment: Franco–German Experiences. In: Freise, M., Hallmann, T. (eds) Modernizing Democracy. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-0485-3_23
Download citation
DOI: https://doi.org/10.1007/978-1-4939-0485-3_23
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4939-0484-6
Online ISBN: 978-1-4939-0485-3
eBook Packages: Humanities, Social Sciences and LawSocial Sciences (R0)