Neo-liberalism and sustainability: is social investment a ‘cure-all’ for the third sector?

Over the last decade, there has been an increased focus amongst UK policy-makers on the marketisation of the third sector in an attempt to increase the sustainability of ‘voluntary, community and social enterprise’ (VCSE) organisations, with a number of policy initiatives focused on the use of social investment to drive this marketisation. Furthermore, such policy initiatives have tended to focus on the ‘investment readiness’ of larger VCSE organisations, which has sought to increase the disparity in sustainability between larger national/regional VCSEs and their smaller local counterparts. This has also shaped the design of social investment products that are arguably not suitable for smaller VCSEs and led to a lack of social investment ‘deal-flow’ at the smaller end of the third sector. Whilst the dominant policy discourse in the UK views this lack of investment as being due to a deficiency in VCSE investment readiness, such an approach also ignores the lack of desire amongst VCSEs to utilise social investment, and the lack of suitable products available. This conflict between the aims of policy-makers and the apparent needs of practitioners has important implications for the culture and context created within policy discourse by dominant narratives in shaping the development of the third sector. This paper seeks to explore this dichotomy between policy and practice through a mixed-methods evaluation of the efficacy of an investment readiness support programme delivered in England. The research captured quantitative organisational demographic data from 868 VCSE applicants to the programme, in order to understand the demographics of small-scale VCSE organisations and also to assess their investment readiness. In addition, qualitative semi-structured interview data was also gathered from 37 key stakeholders (VCSEs; Support Providers; Investors; Commissioners; Policy-makers; and experts) involved in the programme, in order to understand the needs of VCSEs and the suitability of social investment in meeting these. The results to date suggest that there is limited desire (and capacity) amongst smaller VCSEs for social investment and for seeking to scale (to date only 11 VCSEs that have engaged with the programme have secured social investment). The paper argues that policies focused on narrow methods of enhancing sustainability (social investment) are misplaced, and that wider sustainability support is therefore required to support VCSEs. The findings are discussed in relation to the prior literature and have significant implications for academics, practitioners and policy-makers in the UK and globally.