Better Society Capital (BSC), formerly known as Big Society Capital, is an entity that the British government formed in April 2012 with a £600 million investment. BSC aims to invest in organisations that support projects that have a positive social impact, such as social investment. An investment that is made for the benefit of society or a specific group of people is a social investment.
Social investment is about investing or lending money to achieve a social return. Not only does social investment expect a social return but also a financial one.
The Government’s Cabinet Office established BSC. In fact, it was the world’s first social investment institution of its kind.
The funds came from dormant banks** accounts through an independent Reclaim Fund. Additionally, the UK’s four leading high street banks also contributed.
**A dormant account is one where there has been no financial activity for a long time. In other words, nobody has been using it for a long time. In most cases, the account holders have forgotten about them.
The Government set up BSC as part of the Dormant Bank and Building Society Accounts Act 2008. It defined BSC as an entity that exists “to enable other bodies to give financial or other support to third sector organisations.”
Social investment wholesaler
However, BSC does not invest directly in frontline organizations. It is a ‘social investment wholesaler’ which invests in Social Investment Finance Intermediaries (SIFIs). The SIFIs subsequently provide funding and support to social sector organizations.
BSC gets its funds from two sources:
– British banks and building societies pay money from dormant accounts into Reclaim Fund Limited. Reclaim Fund Limited holds onto enough funds to meet reclaims of any account holders. Additionally, it passes what is left to the Big Lottery Fund.
The Big Lottery Fund releases the English portion of this money to the Big Society Trust to invest in BSC. Dormant accounts should provide BSC with up to £400 million, the entity says.
– RBS, Lloyds, HSBC, and Barclays – each committed £50 million in BSC. They are shareholder banks.
BSC says that social investment can provide a new source of funding for charities and social enterprise. Additionally, it can fill financing gaps for innovation, growth, and develop sustainability and autonomy.
Social investment can also enable the recycling of capital for onward investment for investors. It can deepen engagement with communities. Furthermore, social investment can encourage investors to participate in a responsible form of capitalism, BSC adds.
BSC’s strategy
BSC’s current strategy focuses on four key investment areas that reflect pressing social needs and financing gaps:
Impact Venture
Backing early-stage technology startups and innovation that solve social challenges. For example, BSC committed £6 million to the Fair By Design venture fund, which invested in fintech startup Wagestream to help lower-income workers avoid payday loans by accessing earned wages early . This venture portfolio nurtures innovations in financial inclusion, health, education, and other areas, with over 100 impact-focused startups supported so far.
Social Lending
Strengthening the supply of affordable loans and finance for charities, social enterprises, and community businesses. BSC provides capital to social investment finance intermediaries (like community development finance institutions and impact loan funds) so that they can lend to organizations that struggle with traditional bank financing. For example, during COVID-19, BSC partnered with Social Investment Business to launch the £25 million Resilience and Recovery Loan Fund, offering emergency loans to charities such as St John Ambulance Cymru when commercial banks wouldn’t lend. Through such funds, BSC helps social organizations access working capital, grow services, and build resilience in disadvantaged communities.
Social Outcomes Contracts
Investing in outcomes-based financing (such as Social Impact Bonds) that reward successful social programs. BSC works with specialized fund managers to fund interventions where government or commissioners pay only for verified social outcomes. One example is West London Zone (now “All Children”), a collective impact program helping at-risk young people with a two-year support plan. This program was structured as an outcomes contract: multiple commissioners (government, schools, councils, philanthropists) pay for results in children’s educational attainment and well-being , and BSC’s capital via an outcomes fund helped bridge the upfront funding. By supporting such Social Outcomes Contracts (SOCs), BSC aims to improve public services delivery – focusing on prevention and measurable results – while enabling charities to scale proven interventions.
Social and Affordable Property
Channeling investment into housing and property solutions for vulnerable populations. BSC co-invests in funds that acquire or develop properties for social housing, supported living, and community facilities. Notably, BSC has committed substantial capital to funds like Social and Sustainable Capital’s housing funds, which purchase homes for charities to use. For example, Hull Women’s Network (a charity supporting women fleeing domestic abuse) received investment to acquire 82 homes through two funds that BSC backed with £26 million. This allowed the charity to provide safe, stable housing for women and children escaping violence, beyond what short-term shelters could offer. Overall, BSC reports it has invested over £230 million in social and affordable housing initiatives, alongside other investors, to create thousands of safe, secure homes across the UK.