More social investment, less tax, urges Cohen

NEWS FROM THE CITY SEMINAR ON SOCIAL INVESTMENT

Sir Ronald Cohen today told a group of investors gathered at Mansion House that the fact 'social investment is capable of being an asset class has been proven'.

Speaking at the opening of a seminar designed to introduce city financiers to social investment, Cohen said that the talks he was having now around social investment reminded him of the talks he was having 20 to 30 years ago when he introduced venture capital to the UK.

Cohen said that existing social investment funds had been shown to work. He warned that if social investment did not step in to play a part in dealing with 'the social consequences of the market' then the state would have to raise taxation so as to maintain social cohesion and that would stifle entrepreneurialism.

Cohen, who chaired the Social Investment Taskforce and the commission on banks' unclaimed assets, once again reiterated his support for a Social Investment Wholesale Bank and for legislation compelling the banks to disclose their lending similar to the Community Reinvestment Act in the US.

He also said: 'Foundations and trusts need to throw their weight behind this.'

'The time has come for foundation to say to themselves that they have a grant side, they have an investment side and they have a social investment side.'

Speaking after Cohen, Victoria Hornby, an executive of the Sainsbury Family Charitable Trusts, called upon the government to provide tax incentives to foundations that take on social investments.

CEO of Social Finance David Hutchinson added: 'If five per cent of the capital of UK philanthropic endowments in London and if 0.5 per cent of institutional investments in London were unlocked then that would create £5bn for social investment without limiting grant funding.'

Cohen, who is a non-executive director of Social Finance, also showed his support for the concept of a social impact bond which is being pioneered by that organisation - calling it 'maybe one of the most powerful innovations since tax incentives were introduced for philanthropy'.