BSC was the world's first social investment institution of its kind, conceived under Gordon Brown's Labour government, then established in April 2012 by the Cabinet Office of the Cameron-Clegg ministry.
The institution was set up as part of the Dormant Bank and Building Society Accounts Act 2008, which defined BSC as an organization that exists "to enable other bodies to give financial or other support to third sector organisations".
[2] By 2024, BSC had invested a total of £925 million by reinvesting returns from initiatives backed by its original endowment, and had attracted nearly £3 billion in co-invested private capital.
In 2000, Labour Chancellor Gordon Brown set up the Social Investment Task Force (SITF)[8] to look at ways to create wealth and promote enterprise to support economic regeneration and community cohesion.
[9] In March 2007 the Commission published its report "Social Investment Bank – its organisation and role in driving development of the third sector", which provided a blueprint for the institution's funding, goals and governance.
The commission's final report concluded that: 'the third sector urgently needs greater investment and professional support and suitable capital should be available for organisations at all stages of development.
'[10] In 2008, the UK Government introduced legislation to enable unclaimed money in dormant bank accounts to be used for youth facilities, financial inclusion and social investment.
[14] A Conservative policy document said the proposed Big Society Bank would not be restricted to lending but would also invest in innovative products such as social impact bonds.
After consulting with key social sector organisations, Ronald Cohen (BCS's founder chair) and Nick O’Donohoe (BSC's CEO from 2011 to 2015)[16] offered the Government an outline proposal for the Big Society Bank.
"[20] In January 2011 Banco Santander, who have major retail banking interests in the UK, withdrew from Project Merlin negotiations with the Government and is expected not to make any direct payments to the BSB.
[26] For important issues such as a change to the company's objects or removal of a Big Society Capital director, the consent of at least 75% of the Oversight Trust board is required.
[citation needed] Big Society Capital reports regularly to the Oversight Trust on its financial performance, its investments and board and senior manager appointments.
In addition to information provided to them by the BSC Director, the banks receive all Big Society Capital board papers and quarterly and half yearly reports.