Australian First Impact Investment Policy
5 February 2015 at 10:49 am
The NSW Government has become the first in Australia to launch a Social Impact Investment Policy and establish an Office of Social Impact Investment.
Premier Mike Baird launched the initiative at Parliament House in Sydney yesterday, also outlining 10 actions the Government will take to boost the impact investment market.
The Government said its 10 actions would deliver more social impact investment transactions, grow the social impact investment market by removing barriers and build the capacity of market participants.
“The NSW Government believes that social impact investment offers opportunities to improve outcomes for the people of NSW by encouraging innovation and partnerships with other sectors,” the Premier’s Office said.
“[The policy] also has a focus on measuring and achieving results so the Government can be confident of investing in services that work. We look forward to working with the private and Not for Profit sectors in this exciting field.”
The NSW Government’s commitments include:
1. Target delivering two new social impact investment transactions to market per year
2. Publish Social Impact Investment Principles
3. Publish benchmark cost and outcomes data
4. Deliver a Social Impact Investment Statement of Opportunities
5. Hold a series of social impact investment roundtables and market sounding sessions
6. Aim to establish an Intergovernmental Taskforce on Social Impact Investment
7. Promote understanding of the social impact investment market
8. Improve government agency readiness for social impact investment
9. Facilitate non-government sector preparedness for social impact investment
10. Publish a Statement of Success
The Government has established the Office of Social Impact Investment as a joint initiative of the NSW Department of Premier and Cabinet and the NSW Treasury, with its work to be overseen by an interagency Steering Committee.
The NSW Social Impact Investment Expert Advisory Group, chaired by Professor Peter Shergold AC, Chancellor of the University of Western Sydney, will also offer advice.
It is to be comprised of experts in both Government and non-Government sectors to grow the social impact investment market and raise awareness.
Local think tank, Impact Investing Australia said the new policy positioned the NSW Government as a global leader for its commitment to using impact investing to help deliver better services and outcomes for people and communities.
“We are thrilled by the NSW Government’s commitment to growing the market for impact investing and realising the opportunities that come when you bring capital and expertise from different sectors together to address social challenges,” Daniel Madhavan, CEO of Impact Investing Australia said.
“In Australia and further afield, economies face growing gaps between societal needs and the ability to pay for them. Governments and philanthropy alone can’t deliver a prosperous and sustainable society and a healthy economy. We need different ways of doing business.”
Rosemary Addis, co-founder of Impact Investing Australia, Chair of the Australian Advisory Board on Impact Investing and Australia’s representative on the Social Impact Investment Taskforce established by the G8, said NSW was the first Government in Australia to put forward to a whole-of-Government policy for impact investing.
“Importantly, this policy is focused on delivering better outcomes for people and communities in need which will deliver greater innovation, efficiencies and capital flows. It is consistent with and complements the Australian Advisory Board on Impact Investing’s strategy to build the market for impact investing,” Addis said.
“We commend the NSW Government for recognising the critical role Governments need to play in developing impact investing – both as market facilitators and as market participants.”
Philanthropy Australia CEO, Louise Walsh, was at the launch and also welcomed the announcement.
“Philanthropy Australia is a strong supporter of impact investment. We see it as an important tool for delivering social and environmental change, which also complements traditional grant making,” Walsh said.
“We welcome the NSW Government’s release of such a comprehensive social impact investment policy, the first of its kind in Australia.
“The road map they have set out demonstrates that they are very serious about using impact investment as a tool for meeting important challenges in our community, and also that they recognise the important role philanthropy plays in this regard.
“NSW has shown some impressive leadership in this area, and we know some other States are doing some very good work as well and also that the Commonwealth is exploring options through the Prime Minister’s Community Business Partnership.”
In 2013, the NSW Government pioneered Australia’s first two social benefit bonds, seeking to deliver better services and results for families at risk.
The Government said the new policy builds on the success of the bonds, which fund two services – one delivered by UnitingCare Burnside and one by The Benevolent Society – that work with vulnerable families to prevent children from entering out-of-home care or safely return children in care to their families.
“A key commitment in the policy is to aim to bring two transactions to market each year. These will not be limited to social benefit bonds. The Government is open to other investment models that involve risk sharing among participants,” the NSW Government said in a statement.
The Government also announced the Expert Advice Exchange which is to be delivered in partnership with Sydney law firms and will provide pro-bono legal advice for Not for Profits and social enterprises that want to participate in social impact investment.