What we do
Research and Analysis
NSIG produces detailed, honest and thorough organisational reviews which provide our platform for viable planning.
This is where we at NSIG believe we really start to have “skin in the game” with clients.
There are many aspects to constructing a social investment proposition – and by extension, to constructing an “investment ready” organisation. We can categorise these – like in Strategic Planning – as Internal and External factors. Internal factors will include things like Governance, Financial Control and Planning, relevant Expertise, Capability of senior management, etc. External factors will be multiple, and will include things like Market, Need, Service Precedents, Customers, Impact Measurement methods, Pricing, etc. Being able to adequately research, and then analyse the research material generated to allow good quality decision making about social investment objectives is a whole industry in itself. For organisations with emphasis upon their social value, research and development to underpin investment strategy might feel like activity which can be marginalised.
R&D is – culturally – and under-invested area in the social enterprise sector. Usually the responsibilty of senior officers with full roles and responsibilities, these are highly specialised areas of business development which require specific skills and dedicated resources. In particular, when developing new social investment propositions, it is imperative that social enterprises have a really robust, well evidenced case which shows what assumptions they have made. One of the areas of “culture clash” between social enterprise and the finance industry is lack of data. Too often, it is said, social enterprises will produce narratives and case studies, but little data and evidence on their impacts and how they are achieved. Financiers feel they need data on which to make informed investment decisions. NSIG wants to work with clients to fill this gap, either directly or by brokering working relationships with academics and companies which might share a working interest.
Good quality data, properly evidenced, systematically gathered, with comparisons, is crucial to building social investment propositions.
Understanding your intentional impact is crucial to building a successful social business.
In June 2014 The European Social Impact Measurement sub-group, part of the European Commission, produced its report “Proposed Approaches to Social Impact Measurement“. This research indicates that there are currently more than 200 impact measurement methods in use across Europe. We mention this to summarise the challenges facing investors – among other stakeholders – in trying to measure and value impacts in a way which can allow some degree of objectivity. We have faced almost twenty years of attempts to develop robust methods, which again reflects how crucial the function is for social enterprises, because;
businesses account, and social businesses should socially account.
But mainstream businesses are premised upon their financial performance, and can grow in value, in a way that social businesses don’t, and can’t. Accounting and value are linked in “normal” businesses in a way that social accounting and value are not so straightforwardly linked in social businesses. So the development of conventions in impact measurement is necessary, is complex, and will come about eventually because of the amount of resource being put into its development.
One of the ways a social business could grow in value would be if the quality, sustainability and quantity of its impacts could be linked to its financial success. In other words, if a social businesses impacts were a part of its balance sheet.
This is the sort of work that NSIG can contribute to, in analysing the impacts that a social business has, and examining how these can become part of the business balance sheet, and how they can be part of a social investment proposition. Understanding and integrating impact measurement into a businesses activities – as opposed to treating impact measurement as part of the nuisance “monitoring and evaluation” of a grant report – is crucial to the success of a social enterprise.
NSIG has a a number of accountants and financial technicians who can model out your business to explore different scenarios and profiles.
NSIG has a number of associates who are qualified accountants or financial technicians. We have extensive experience of “modelling” social enterprise financials as part of the process of strategic and business planning. Being able to produce solid, detailed financial forecasts to accompany social investment propositions is again, crucial.
To be able to succesfully model a business, and present options to a board which can assess proposals in terms of risk and mission alignment, comprehensive analysis and research has to have been undertaken. Coupled with strategic assessment, some financial scenarios can be generated which can reflect various levels of risk appetite, likely future incomes or costs of delivering and improving services – along with the costs of moving the organisation more towards financial sustainability, and further away from hand to mouth survivalism. Factor in the management of execution risk – how the business will translate the aspirations of planning into realities of implementation – and we have a business plan and investment proposition we can take to investors.
Forecasting income and expenditure, balance sheets and capital requirements,and being able to generate scenarios where perhaps less money is earned, or costs of service increase, is a really important part of proposition construction.
Values, Aims and Interventions
Getting explicit about your purpose and intentions is key to planning a successful social business.
Social purpose – what improvement the social enterprise is intended to bring about – defines a huge amount of the strategy and planning of a social enterprise, and this is as it should be. However, there are increasing numbers of social enterprises which are able to successfully combine social purpose with planning to achieve business viability. Striking this balance is a challenge, and is one that we at NSIG can help to address.
NSIG will work with you to understand in considerable detail what your organisations aims are, and what impact you create. We will also collaborate with clients to best understand how a business strategy can be constructed which will allow greate achievement of these aims, and what sort of social investment might be most suitable for each organisation, with a view to achieving greater business viability and sustainability. The balance can be struck – with the right resources and commitment.
For instance, some organisations will be best served by buying or refurbishing a building, or equipment and vehicles which can help to expand their service. Others will be seeking contracts to deliver services. Some will want to put a value against their impact as part of the process of creating success or outcomes related payment systems. Still more will have fundraising strategies they need resources to implement. There are specialist investors for all these. In turn, seeking out these types of investment will make demands upon the social enterprise, demands which can strengthen the organisation and by increasing organisation robustness, increase the chances for social investors of making successful investments. This virtuous cycle can continue, as reduced risk for investors can lead to reduced expectation of returns.
And we are particularly interested in how social enterprises can ensure that the investment propositions they pursue will always favour them and support them to remain in control – rather than having to involve multiple intermediaries.
We’ll pull it all together in a strategic plan which can guide your organisation in the coming years.
Gathering data, evidence and research, along with assessment of values, aims and impacts means that social enterprises can undertake an informed strategic process. This in turn allows assessment of capabilities or capacities within the company, appetite for change and expansion, and gaps which need to be filled in terms of resources, personnel and systems. NSIG uses a variety of approaches to strategic planning but has had particular success using the TOWS method –
TOWS allows us to start the process of informed planning of actions which can lead to both successful organisational development and successful social investment. Honest appraisal of the internal capability of the organisation, from governance through management to quality of services, analysis of financial track record and current financial position, current clients and customer base, contracts, impact valuation, coupled with assessment of the relevant external factors associated with the organisations aims (as well as examination of the most acute threats on the organisation) can inform financial modelling, risk management and organisational action planning.
Taking propositions to investors is our goal. We can pull together all that changes you need to implement to become an investable proposition.
As a result of work on R&D, market analysis, financial assesssment and strategic planning, NSIG can work with client companies to put together detailed action plans as they seek to become “investment ready”. It is important to realise though that this is not an additional or ancillary process which takes place alongside the core business activity – rather working to become meaningfully investment ready will likely require root and branch reform of the business.
We concentrate on a number of areas –
Financial Modelling and Forecasting
Markets, Needs and Service Suitability
Organisational Capacity and Resources
Want to know more?
NSIG and its associates work with a range of clients to help to develop their social investment opportunities. This work can range from mainstream business support through the development of investment readiness strategies and action plans, to work on the construction of investment propositions.
NSIG aims to take a much longer view of working relationships with client social enterprises, to allow deeper understanding of the social aims of the business, to allow assessment of requirements for the business to become investable, and to allow construction of social investment offers which can help the business achieve long term sustainability. In developing these much more robust, detailed relationships we believe that we increase the likelihood of putting together sucessful deals for both investors and investees. It is our intention to always have “skin in the game”. We look to share risk with clients in constructing investment propositions.
Northern Social Investment Group
Wigan Investment Centre