New Social Enterprise Fund ‘Fantastic Potential’ for NFPs
1 June 2016 at 9:10 am
Impact Investing Australia has welcomed the launch of a half a million dollar grant fund to help Not for Profits establish and grow social enterprises via a partnership between donor peak body Philanthropy Australia and the National Australia Bank.
NAB is to contribute $250,000 and Philanthropy Australia said it would match this amount through contributions from its trust and foundation members, creating a $500,000 grants fund aimed at growing the number of social enterprises managed by Not for Profits – making it one of the largest funds of its kind in Australia.
CEO of Impact Investing Australia Daniel Madhavan said impact investing holds fantastic potential for Not for Profit organisations to grow their impact and sustainability.
“This new fund will make an important contribution to developing the Not for Profit sector’s capacity to harness impact investing – including identifying potential new income streams and devising innovative solutions to the problems they are tackling,” Madhavan said.
General manager of corporate responsibility at NAB Jodi Geddes said the partnership would stimulate much needed new funding streams for Not for Profits and expand the way in which trusts and foundations have historically engaged with the sector.
“Increased pressure on funding and disruption to traditional funding models are putting pressure on the Not for Profit sector to develop new income streams,” Geddes said.
“We believe that impact investing has a vital role to play in addressing these challenges but it will require the entire sector, including trusts and foundations, to come on the journey.
“We want to help create opportunities for trusts and foundations to make investments in the sector that provide a return. This return can then be reinvested in other social enterprises allowing trusts and foundations to have a vastly greater impact than that which can be achieved by way of a pure philanthropic grant-based model.”
Philanthropy Australia CEO Sarah Davies said the partnership with NAB would be a catalyst for real and long-term change in the role of philanthropic organisations and how they support innovative and sustainable business models for Not for Profit organisations.
“We’ve had really strong interest from a number of other parties to join NAB and co-fund the project and hope to announce those additional partners soon,” Davies said.
“The opportunities presented by emerging impact investing models and mission related investing approaches are exciting. They open up significant resources that can be put to work for community and financial returns: keeping the investment engines in philanthropy running, adding more resources to achieve positive social change and allowing grant capital to be used most effectively. The opportunity to use layered and blended resourcing and funding to achieve maximum use of each element of the philanthropic dollar represents huge potential.
“The philanthropic community is perfectly placed in this equation – we have the knowledge about impact, change, finance and business – it make perfect sense for philanthropy to collaborate with the community organisations who are working to create the positive social impact we’re all aiming for. Emerging impact investing approaches also give us more scope for philanthropy to help build the capability and capacity of Not for Profits to develop their business models for sustainable change.
“And we’re seeing the appetite for it – the impact investing workshops we’ve been holding in partnership across the nation this week have had really strong attendance by leading philanthropists in each state. It’s a growing movement and awareness is building. We’re really only just starting the journey, but it’s a great first leg. I have no doubt we’ll see really strong financial support for the co-funding element of the NAB/PA Impact Investing initiative.”
Philanthropy Australia said the funding grants were expected to be available by the end of 2016 when Not for Profits would be able to apply for capacity building funds of up to $50,000 to assist them to be impact ready.
The new fund is part of a 12-month partnership that will also include a series of educational activities designed to increase the number of trusts and foundations using impact investment as an investment strategy.