Social investment is a "passing phase" that will be have been forgotten in 15 years’ time, a trustee of the Esmée Fairbairn Foundation, the UK’s biggest investor in social impact bonds, told delegates at the Lord Mayor’s Charity Leadership Programme Charity Chairs Conference yesterday.
Speaking at the event in London, Sir Thomas Hughes-Hallett, who was chief executive of Marie Curie Cancer Care until 2012, said that Esmée Fairbairn had been internally polarised in its views about the value of social investment and social impact bonds – despite having made at least 63 investments totalling £23m through its social investment fund since 2008.
"There are people who give money and people who write and talk at great length about social enterprise, social investment and social impact bonds, but the public doesn’t care – and nor do I," said Hughes-Hallett, who has been a trustee at the foundation since 2008.
"My one guarantee to you is that this is a passing phase - one that in five years time or 15 years’ time will be forgotten about."
Expressing what he said was a contentious view, Hughes-Hallett said his main worry about social investment – which is often promoted as a sustainable alternative to philanthropy – was that the ethos of the sector could be damaged by people pursuing unethical practices.
He said he saw these particularly in the health sector, in which groups of doctors and nurses had been setting up companies that would enable them to pay themselves much higher sums than they would earn in the NHS.
He said such groups were branding these initiatives "very prettily" as social investment, but that the sector should be "very, very careful".
In a panel debate on the challenges facing the boards of non-profit organisations, Hughes-Hallett also spoke about the importance of change in charities.
He said that it was sometimes necessary to remove the obstacles to change and be as tough as the commercial sector, citing as an example the removal of all of Marie Curie’s board members within two years of his appointment to the cancer charity in 2000.