England recently launched Big Society Capital as part of its effort to develop the social finance market. BSC is a billion-dollar fund that was capitalized with dormant accounts of UK's largest banks, as well as with funds that the banks gave in order to improve their post-economic recession image in society. The bank's mandate to maintain long-term sustainability requires it to generate enough revenue to cover at least the costs of operations. Its other mandate is to build the social finance market. These two mandates may clash and complicate the life of its managers. Many market-building investments may generate insufficient cash flow to fit under the sustainability mandate. Some of those may be investments to smaller organizations where the cost of the loan is greater than the risk-adjusted return.
BSC's chairman is Sir Ronald Cohen, who helped start Social Finance UK, the organization that is implementing the first demonstration project for social impact bonds.
Notably, BSC is the world's largest explicitly hybrid organization. It comprises three separate organizations.
Big Society Capital, world's largest hybrid organization
1. Big Society Capital Trust, the holding company.
2. Big Society Capital Limited, the operating company that will make for-profit investments.
3. Big Society Foundation, which will "receive charitable donations and develop grant programmes to support the Group's mission." (source)
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