Social investment will not achieve the desired growth unless its promoters stop telling charities that they are wrong to be sceptical about it, the chief executive of Leonard Cheshire Disability has told a fringe event at the Conservative Party conference.
Clare Pelham was speaking in Birmingham at a meeting called the Social Investment Summit, organised by the charity leaders group Acevo yesterday, where panellists and audience members agreed that better communication was the key to growing the market.
Pelham said the social investment sector needed to get better at marketing its products and understanding its customers, drawing on experiences at her previous job at Coca-Cola. "When we had a product that people weren't buying into, we didn't tell them they were wrong," she said.
"One thing in this sector that we have in common – massive generalisation – is that we're pretty optimistic and we're pretty innovative, which makes it even odder that the take-up of social investment is what it is," she said. Pelham said that charities needed to be made to "feel less alienated" from social investment products. She said: "I would suggest that in marketing terms it is better to start with where the customer is and take them on that journey."
The event chair, Caroline Mason, chief executive of the Esmée Fairbairn Foundation, said that Pelham's customer service insights from her private sector days would be useful to the sector. Good customer service "is something that the sector doesn't always do well", she said.
Also speaking on the panel was Nick O'Donohoe, chief executive of the social investment wholesaler Big Society Capital. "There are still a number of challenges, and the big challenge really revolves around demand," he said. "We've got to do a better job of explaining to organisations where social investment works and why."
He said that 100 charities had so far benefitted from BSC capital, and that this would grow to 1,000 in the next few years.
But Pelham said this would need better marketing. "I profoundly disagree with you Nick about the 1,000 – because I think that unless something fundamentally changes, that won't happen," she said.
O'Donohoe replied: "Marketing loans is not like marketing Coca-Cola."
Sir Stephen Bubb, chief executive of Acevo, agreed that the social investment sector needed to make itself more accessible. "As with any new industry, it attracts a whole load of geeks who talk in a lingo nobody understands and then they forget the customer," he said.
Bubb also said that the simplest products were often the best. "There is no substitute for simple, straightforward loans."
A poll of attendees found that two-thirds believed improving information and increasing discussions about social investment were the best way to grow the sector.
David Gauke, the Financial Secretary to the Treasury, who was also on the panel, said: "Looking at this as a minister who doesn't deal with this sector on a day-to-day basis, this has been an example of very good collaboration. I’ve been struck by the very constructive nature of these relationships; it's been an engagement that's been entirely positive."
At an equivalent event held by Acevo at last week's Labour Party conference, Lisa Nandy, the shadow minister for civil society, said that social investment's growth should be achieved by better training of public sector commissioners.