Building the Evidence Base for Community Investment – Our Learning Approach
Earlier this year Big Society Capital launched a range of community investment initiatives with partners, including the £30 million Community Investment Enterprise Facility, to help meet the capital needs of underserved small businesses located in disadvantaged communities across the UK. Core to this was our strong desire to learn and build a robust evidence base of CDFI lending – this update sets out how we plan to do that.
What are we trying to test?
When designing the range of community investment initiatives, we developed a theory of change that set out our hypotheses on how we believe we could influence a change in the CDFI market to support it to scale it social and economic impact. These initiatives alone cannot achieve our desired final outcomes for communities, people and the market as this requires a broader effort from many different parties, however it acts as a starting point and framework to test out hypotheses. The below diagram sets out our simplified theory of change on what we hope to test:
How are we testing this?
The main way we’re testing these hypotheses is by commissioning Sheffield Hallam University’s Centre for Regional Social and Economic Research (CRESR) to undertake a long-term evaluation of the Community Investment Enterprise Facility and market over the next seven years. It has been set up with the following aims:
- To evidence the financial performance of CDFI lending into small businesses;
- To evidence the social and economic impact of CDFI lending at a community level and for individuals;
- To consider the change in the CDFI market over the life of the Facility, including the impact of the initiatives BSC and its partners are leading; and,
- To develop and model good practice in approaches to measuring social and economic impact of CDFI lending.
An evaluation framework sits beneath these questions which goes into more granular detail on what will be tested using quantitative data from the small businesses and CDFIs that receive finance, and from qualitative evidence collected through surveys and interviews. The full framework can be found here for those wanting to dive a little deeper, recognising that this is an iterative document that will evolve as the evaluation progresses.
The findings from the evaluation will be shared through a six-monthly data dashboard, short thematic reports, annual reports on key findings, and an interim and final report. We’ll be publishing all of these in the Knowledge Centre on the Community Investment website.
We’re particularly excited about the potential power of the data we collect through the Facility, and plan to make it as open and accessible as possible using tools such as Tableau so users can explore their own interests. We also plan to produce infographics to make the data digestible and engaging.
The evaluation can’t and won’t answer every question, so we’ll also be collating past and future research and knowledge building efforts of others to share alongside the evaluation outputs in the Knowledge Centre. This will help us to build as full a picture of CDFI lending as possible.
We’re also keen to learn and share lessons from elsewhere in the world to bring best practice and ideas to the UK. With the sponsorship of Citi, we recently took five CDFIs to the US to learn from their CDFI counterparts and other organisations supporting the US CDFI industry. We’ll be sharing our initial lessons learned next week followed by a more detailed learning report in the new year. Other CDFI partners have spent time in Europe and will also be sharing their reflections in the coming months.
There’s a huge potential to learn and inform the evolution of the UK CDFI market that builds on the research that has gone before. While we won’t know everything straight away, our hope is that a fuller picture will emerge in the coming years.
 CRESR is Sheffield Hallam’s Centre for Regional Economic and Social Research; CEIF is the Community Investment Enterprise Facility managed by Social Investment Scotland; Aeris is a US based rating system that is being introduced to the UK.Return to knowledge centre