Research and analysis

Evaluation of the Impact Investing Institute grant: Summary report

Published 11 July 2025

To support its key role in developing the impact investing market in the UK, in 2019, the Department for Culture, Media and Sport (DCMS) provided cornerstone funding to set up the Impact Investing Institute (‘the Institute’) as an independent, non-profit infrastructure body for the impact investing market in the UK. 

In 2022 DCMS provided a three-year grant to the Institute (which is the focus of this evaluation) to continue developing the impact investing market with a particular focus on place-based impact investing (PBII). The definition of PBII used by the Institute DCMS and throughout the rest of this report is:

“Investments made with the intention to yield appropriate risk adjusted financial returns as well as positive local impact with a focus on addressing the needs of specific places to enhance local economic resilience prosperity and sustainable development.” The Good Economy. ^{[footnote 1]}

The PBII grant composed of four separate but interlinked work streams:

• Workstream 1: Reaching the unconverted – aiming to increase the number of institutional investors aware of, and interested in, PBII.

• Workstream 2: National Place Coalition and Place Pilots – aiming to build a “Place Coalition” of a range of stakeholders involved in PBII and develop two pilot projects (in Wakefield and Southampton).

• Workstream 3: Unlocking wholesale funding for community development finance institutions (CDFIs) – aiming to increase investment into the CDFI sector through the development of a national financing vehicle, and support for CDFIs to increase their investment readiness. 

• Workstream 4: Contributing to the national conversation – aiming to engage UK policymakers and thought leaders in discussions around PBII. 

Key findings

The evaluation found that the Institute made key contributions to unlocking £77m of external investment (principally through investments into the CDFI sector). 

In addition, the evaluation found that the Institute made good progress in supporting a range of intended outcomes relating to:

• increased investor awareness and understanding of PBII and of the potential to invest in the UK’s CDFI sector. 

• more connections between key stakeholders in Place Pilot areas, with the Institute introducing the local authorities to investors / asset managers.

• supporting increased awareness and understanding of PBII amongst the Place Coalition.

• improved knowledge, skills and confidence amongst CDFIs.

• increased investment into the CDFI sector.

There was also evidence that the Institute made some progress towards:

• shaping investors’ intentions to take a PBII approach in the future.

• helping Place Pilots to develop new investment opportunities.

• facilitating CDFIs’ ability to take on additional investment.

To date there was no evidence of additional capital being allocated to Place Pilot areas for specific investment opportunities identified through the Place Pilot activity. A key learning was that investment outcomes for places are likely to take much longer than originally intended. 

Evaluation approach

In 2022, DCMS commissioned Ecorys to support the Institute to monitor its activities, and to conduct an independent evaluation of the grant-funded PBII programme. The three main objectives of the evaluation were to:

• Objective 1: Understand the effectiveness of the delivery of the Institute’s PBII programme.

• Objective 2: Assess the impact of the PBII programme in developing a PBII market in the UK.

• Objective 3: Assess the value for money of the grant.

The evaluation used a mixed-method approach, and included interviews with 57 stakeholders involved across the workstreams; longitudinal case studies with the two Place Pilots (interviewing key stakeholders involved in each year of the evaluation); a survey with asset managers engaged with the Institute (7 responses out of 25 invited); analysis of programme management information and documentation; and secondary analysis of other data and reports. ^{[footnote 2]}

Process evaluation findings

Over three years, the Institute met almost all key performance indicators in its DCMS grant agreement, with those not delivered mainly due to wider external factors. Success factors in the delivery of the PBII programme included:

• the perceived credibility of the Institute and its convening power;
• the Institute’s role in PBII thought-leadership;
• its flexible engagement approach;
• effective collaboration with other organisations to deliver the programme;
• strong social media outreach;
• having a direct government relationship and collaboration with DCMS;
• and being responsive to feedback collected via the evaluation, and implementing recommended changes.

“The Institute plays an important role around convening as they have been, and they have a fantastic network of both within the government and within the private sector and impact-minded investors. So I think their role as a convener is really important and the awareness-raising side of things, and the job of translating the impact and maybe the financial side of things to that audience, to get more investment is very important.”

CDFI stakeholder

While there were challenges, these were not insurmountable and ultimately led to useful lessons learned for future PBII initiatives, and did not impact on the successful delivery of the overall programme. The challenges identified included:

• limited capacity amongst the Institute’s PBII team at times,
• resource constraints for local authorities,
• tracking investor engagement outcomes,
• and external factors like elections and inflation.

“A lot of this work requires a different kind of understanding of the way in which the investors work, and that the culture and values of the investors and the mechanisms are different to the traditional local authority approaches. All of that requires time to learn and understand, and so I think there is something about whether it be local authorities or their partners, whether there’s access to some funding that would enable that capacity to be built within the sector, because you we rely very heavily on the Institute to provide that expertise and knowledge base. We could do a lot more if we had somebody locally to do that.”

Place Pilot stakeholder

The Institute was generally effective in engaging a range of stakeholders in the PBII programme. In terms of investors, despite the initial aim of the PBII programme to increase engagement with LGPS, the Institute’s level of engagement with LGPS generally stayed the same over time, but asset manager collaboration increased from January 2024 to January 2025. Throughout the programme, the Institute adapted its approach based on feedback, learning the importance of balancing depth and breadth of investor engagement by reaching investors through various activities like conferences, roundtables and the Place Pilots.

Engagement with local authorities occurred primarily through the Place Pilots in Wakefield and Southampton. The Institute’s flexible approach helped local authorities to explore whether local investment opportunities would be suitable for PBII. Pilot stakeholders emphasised the added value of the Institute, in terms of helping local authority teams understand how best to engage with – and pitch their opportunities to – investors. Further positive feedback highlighted the Institute’s expertise and support in then connecting local authorities with investors, and bringing investors to the Places, which was particularly helpful to do outside the context of formal procurement rules, to support open and honest discussions about what could be feasible investment opportunities.

“The only way you can really grapple or begin to grapple with the nuances of a place is to go there and to soak it up and to see the atmosphere and the challenges and, you know, get a feel for the potential, and the people and the businesses there and you know you’ve just got to see it with your own eyes. You can’t see it on a plan. You can’t see it in a site description. You’ve got to go and form your own view.”

Investor

Most CDFIs participated via the capacity-building programme, which was designed to address pressing needs such as marketing, recruitment, and strategic planning. Overall, participants were satisfied with the experience of the programme, highlighting the benefits of being able to meet with other CDFI CEOs to hear their experiences, having one-to-one support from a business coach, and being supported to develop a strategic ‘action plan’ for their organisation.

Policymakers appreciated the Institute’s engagement, noting shared goals and valuable discussions about the role of private investment in supporting local economic growth. They were interested in seeing more evidence on the Place Pilots.

The Institute was also effective in building Diversity, Equity and Inclusion (DEI) considerations into activity, ranging from implementing its events diversity policy, to being mindful of the demographic and lived experience diversity in its various groups. External stakeholders involved in the PBII programme often reflected they found the activities accessible and inclusive.

“I always think [chair] is a very good chair of these meetings so [they] always [try] to make sure that everyone has a good opportunity to speak. [They are] very sort of aware of, you know, making sure that maybe quieter members of the group are asked for opinions and that kind of thing.”

CDFI stakeholder

Outcomes and impact evaluation

The Institute made good progress in supporting outcomes relating to:

• Increased investor awareness and understanding of PBII and of the potential to invest in the UK’s CDFI sector. There was strong consensus across programme and external stakeholders that the Institute has played a key role in raising awareness of the CDFI sector, through its CDFI Working Group, Advisory Panel, the Place Coalition, via bilateral meetings and via social media.

“I don’t think we would be, as a sector, where we are now without them.
Again they bring through that policy and that understanding and that independent body to drive and bring these partners together because again the banking industry are all competing against each other. So to actually bring these investors together and to talk together, I think has been huge, absolutely huge for our sector and we’re finally being heard.”

CDFI stakeholder

• More connections between key stakeholders in Place Pilot areas, with the Institute introducing the local authorities to investors / asset managers (with different types of specialisms) to discuss different potential investment opportunities (see the Box below).

• Supporting increased awareness and understanding of PBII amongst the Place Coalition, with the Institute’s role in convening key stakeholders and organising the events seen as being pivotal for helping stakeholders understand their role in shaping the PBII market. The Place Coalition also led to further conversations about possible investment deals, including one into the CDFI sector (see below).

• Improved knowledge, skills and confidence amongst CDFIs. The CDFI capacity-building programme (initiated/funded by the Institute and led by Responsible Finance) received positive feedback from those involved, with participants reporting outcomes such as increased understanding of how to market their offer to potential customers, a better understanding of how to improve their organisation’s efficiency, and increased confidence about managing more investment in the future. Some CDFI stakeholders also felt the Institute’s wider ecosystem-building activity around the CDFI sector had helped bring a morale and confidence boost for the sector. 

• Increased awareness and understanding of PBII amongst policymakers. Over the three years of the programme, policymakers interviewed noted that engagement with the Institute helped them to see the potential of PBII in supporting their policy ambitions, and develop a greater understanding of the opportunities and barriers affecting progress when taking a place-based approach. At the time of reporting, this was particularly important given the current policy focus on local economic growth.

There was also significant progress in increased CDFI investment, with the launch of two major funds (the £62 million Community Investment Enterprise Fund 2 (CIEF 2) and £154 million Community ENABLE Fund (CEF)) and a smaller CDFI deal (with a value of up to £15 million) in advanced stages of due diligence at the time of reporting. The Institute played a key role in supporting the development of CIEF 2, engaging in regular conversations with Lloyds (the first commercial bank in the UK to invest in the CDFI sector) about developing the CDFI sector, and sharing their expertise on how commercial banks have invested in the CDFI sector in the US. The Institute also shared progress of the Fund development to the CDFI Working Group, raising awareness of its launch. The smaller CDFI deal likely would not have happened without the PBII programme, as connections between the key stakeholders involved were made via the Institute’s Place Coalition.

“We are now in the position of being a whisker away from finalising a deal with [investor] for the creation of a specific place-based investment of [up to £15 million]. So that’s directly because of the work of the Institute.”

CDFI stakeholder

There was evidence of some progress towards the Institute:

• shaping investors’ intentions to take a PBII approach in the future (both amongst engaged asset managers and LGPS) through one-to-one support provided to individual investors, and more generally, the Institute continuing to champion their recommendation ^{[footnote 3]} to Government that LGPS allocate 5% of their portfolios to support local impact. Analysis (see Annex below) indicates that from 2023-2024, LGPS had allocated at least £1.8 billion to these types of projects;
• helping Place Pilots to develop new investment opportunities, by helping them to develop a prospectus of different activities;
• supporting Place Coalition members to see more evidence on PBII, through convening stakeholders to share to share their experiences and learning;
• facilitating CDFIs’ ability to take on additional investment, through ongoing efforts to support CDFI capacity-building;
• and supporting greater incentivisation amongst policymakers to support private investment for generating local impact, for example, by contributing to consultation responses, attending working groups, holding bilateral meetings and sharing case studies.

To date, there was no evidence of additional capital being allocated to Place Pilot areas for specific investment opportunities identified through the Place Pilot activity. A key learning was that investment outcomes for places are likely to take much longer than originally intended, due to various factors such as planning permissions and land ownership. However, Place Pilot stakeholders showed optimism about the potential for their areas to see increased investment (in opportunities to develop affordable housing, commercial spaces and cultural activities) following their involvement in the Institute’s PBII programme. This finding indicates that measures of success in similar place-based approaches should relate to indicators towards a place’s ‘investment readiness’ (rather than actual investment allocated). Measures could include:

• increased knowledge, skills and capacity in the local area;
• identification and development of potential investment opportunities;
• increased connections between investors and key stakeholders in the local areas;
• and due diligence being undertaken on projects.

Outcomes for Place Pilots

Wakefield

The Wakefield Place Pilot, running from mid-2022 to March 2024, first involved activities focusing on the identification of local investment opportunities, followed by investor engagement activities (such as meetings at conferences and bilateral meetings).

Over the course of the pilot Wakefield engaged private sector investors in a range of opportunities across three key areas: urban regeneration, clean energy, and SME finance. Specific potential projects discussed included the Owlers Solar farm project, an extension of Wakefield’s enterprise zone, and expanding a housing zone in Castleford.

Outcomes reported included:

• increased awareness within the council about how PBII could be relevant to their local strategic ambitions;

• improved connections between the council and local stakeholders in Wakefield involved in the development opportunities;

• increased connections between the council and investors;

• and improved knowledge within the council on how to present potential opportunities to investors.

At the end of the Pilot, the council was considering its role in facilitating impact investing into the region in future (e.g. if the council would be seeking investment or if instead it would be the broker between projects and investors).

Southampton

The Southampton Pilot started in mid-2023, ending in March 2025, with the Council exploring how a PBII approach can unlock investment into the city to capitalise key regeneration initiatives while also enhancing the city’s creative and cultural sectors, building on their UK City of Culture 2025 bid. The pilot started with a workshop with Southampton Forward (an independent Culture Trust for Southampton), the council, investors and other local partners, to present some potential investment opportunities, such as the Old Northam Road site (which was described as having opportunities to develop affordable housing, commercial space and cultural activities) and the city’s Cultural Zone. A further three convenings (with investors, social investors and philanthropists and a Place Coalition, respectively) occurred in 2024.

The main outcomes reported included:

• improved understanding amongst Southampton stakeholders about the types of information investors are interested in’;

• increased clarity on what investment opportunities PBII could be used for;

• improved skills in speaking to and engaging with investors;

• and new (and maintained) connections with investors.

In both pilots, stakeholders noted the key role of the Institute in initiating activity, helping to increase stakeholders’ understanding and knowledge about PBII, connecting them with investors with relevant thematic specialisms, and keeping up the momentum with the projects.

“The Institute has been central, we would not have these connections and they’re just really good, they introduce us, we have the conversation, they pick the conversation up, they keep it going. They keep people warm. They’re just pretty perfect, actually. It’s exactly what you want from a partner.”

Place Pilot stakeholder

Value for money evaluation

The cost of the PBII programme was around £1 million, with the programme generally delivered on time and on budget. There was good evidence to suggest that the Institute minimised costs while delivering the programme, delivered many aspects of the programme efficiently, was effective in achieving most of its intended aims and objectives, and made good efforts to ensure equitable use of resources and delivery of activity. In addition, the Institute’s work helped to catalyse and unlock large amounts of investment; with key contributions to around £77 million of investments to the CDFI sector via the CIEF 2 and CDFI-related investment (see the table below). It also successfully secured additional funding to continue its PBII activities.

Contribution of the PBII programme to unlocking investments

Related workstream	Investment/capital allocated	Investment name	Aim of fund	PBII programme contribution
WS3 - CDFIs	£62m	Community Investment Enterprise Fund 2	Investments into 3 CDFIs aiming to lend to 800 small businesses across the North, West Midlands and Wales	Some contribution - Key role in facilitating the funding
WS2 – Place Coalition	£10-15m	[Not named due to commercial sensitivities at the time of reporting]	Finance to small-to-medium sized enterprises in the North of England	Major contribution - Would not have happened without the PBII programme
WS3 - CDFIs	£154m	Community ENABLE Funding	Funding and capacity building for CDFIs	Limited contribution - but the Institute will be supporting the programme going forward
Total	£226-231m	-	-	-

Overall, based on the available evidence, the grant-funded activity can be considered good value-for-money.

Recommendations

Based on the evidence presented in the report, there are some areas for consideration for the Institute and DCMS going ahead:

• There is demand from policymakers and investors for evidence on the effectiveness of taking a PBII approach, particularly the learning from the Place Pilots. Further activity could be done to publicise the Institute’s existing ‘PBII Emerging impacts and initial reflections’ report ^{[footnote 4]} to these stakeholders, as well as sharing other evidence (e.g. internal and external evaluation findings) on ‘what works’. This is particularly important given the current – at the time of reporting – policy focus on local economic growth in the UK.

• Asset managers engaged in the research also indicated that they would welcome further activity from the Institute to engage with asset owners to raise awareness of taking a PBII approach, to help support sufficient demand for the PBII products that asset managers can then develop.

• It could be beneficial undertaking more activity (including holding events) across England’s regions and also in the devolved nations, as there was interest from a range of external stakeholders to see this (if feasible/possible in budgets).

More broadly, the following recommendations could be considered going forward, to help continue drive forward the PBII market development in the UK:

• More support is needed for local authorities to ensure sufficient capacity – and dedicated staff time/resource – to take a PBII approach in their area. Programme and external stakeholders highlighted the need for further support from central government to help local authorities to build their capacity, skills and experience, to help ensure a PBII approach can be embedded in the longer-term.

• Future similar market-building programmes would benefit from taking a similarly flexible and responsive approach, both in terms of stakeholder engagement as well as programming of activities. Grant programmes would also benefit from having a certain level of flexibility, for activities to be adapted – and budgets to be reallocated – as needed, depending on the wider market development.

• It would be beneficial to develop a consistent approach / methodology for measuring commitment to local impact investments to make it easier to track the growth of the PBII market. It would also help inform where there may be gaps, and where future investments could be targeted.

Annex: Local Government Pension Scheme analysis

To help contextualise the outcomes of the Institute’s activity in relation to the development of the broader PBII market, each year the evaluation analysed Local Government Pension Schemes’ (LGPS) self-reported involvement, or intention to be involved with, PBII.

The table below summarises the number of annual reports referencing PBII specifically, the number demonstrating intentionality, and the number (and value of) new commitments and/or investments to PBII.

There has been a steady increase in the number of LGPS reports demonstrating intentionality, from 8 in 2021/22 to 20 in 2023/24, with the number outlining commitments/investments raising from 3 to 10 across the same time period. However, what is most striking is the value of commitments or investments, increasing by over £0.9bn from 2022/23 to 2023/24, to £1.03bn. This included new investments being made in 2023/24, as well as work being done to identify and recategorise existing local investing.

LGPS PBII activity over time

	PBII White Paper (2018/19)	Year 1 (2021/22)	Year 2 (2022/23)	Year 3 (2023/24)
Number of LGPS referencing place-based impact investing specifically	n/a	2	2	2
Number of LGPS reports demonstrating intentionality	6	8	11	20
Number of LGPS reports outlining new commitments and/or investments to PBII (or local or regional investments, as defined by LGPS)	n/a	3	7	10
Value of these new commitments/investments	n/a	At least £145m	At least £398m	c. £1.03bn

In terms of the contribution of the Institute’s PBII programme on this, in Years 2 and 3 of the analysis, none of the annual reports directly mentioned the Institute or its PBII programme, but reports often mentioned the reference to setting an ambition of up to 5% of assets to local investments, which, as mentioned, was the recommendation that the Institute made, and was included in the Levelling Up White Paper in 2023. This indicates that the recommendation had a lasting influence on LGPS decision-making. In addition, of the 9 LGPS stating their commitments to local investments in 2023/24 annual reporting, the Institute was – according to the Institute’s stakeholder map – actively engaging with 4 LGPS, and had some engagement with one.

1. The Good Economy. (nd) Place-based impact investing: creating pathways to a good economy. ↩

2. The market-sizing report, an investor survey distributed through the PBII Forum, an internal evaluation of the CDFI training programme by Responsible Finance, and an annual analysis of LGPS’ annual reports, to understand if/how uptake of a PBII approach amongst LGPS changed over time. ↩

3. Recommendation first made in the PBII White Paper: The Good Economy, Impact Investing Institute and Pensions for Purpose (2021) Scaling up institutional investment for place-based impact. White paper. ↩

4. Place-based impact investing: Emerging impact and insights ↩