Impact Investing Budget Update
3 September 2018 at 5:11 pm
The last two federal budgets contained a range of impact investing initiatives. The Department of Social Services provides Kyrn Stevens with an update on progress.
In the 2018-19 budget, the government committed over $8 million for two new Social Impact Investing (SII) initiatives to develop a payment by outcomes trial with a service provider and support the SII sector to better measure their outcomes and impacts.
Payment by outcomes trial
$1.6 million is allocated to develop a payment by outcomes trial with a delivery partner.
This will include the selection of a partner organisation, undertaking modelling and analysis to underpin outcome measurement and outcome payment calculation, and designing an evaluation plan.
Building sector capability
The remaining $6.7 million will provide targeted support to help build the SII sector’s capability to measure and demonstrate their non-financial outcomes.
This initiative will provide online resources and tools for the sector.
This funding will also cover research and analysis to develop the tools, including through longitudinal studies, which practically demonstrate how organisations can measure outcomes.
The Department of Social Services (DSS) has commenced engagement with the sector about the development of these tools and resources, and to identify what other analysis is needed to support this work and gain further insights on implementation.
Further consultations are due over the coming months.
2017-18 budget measures
The 2017-18 budget measures will support selected social impact investments and help build the Australian SII market.
Funding of $8 million over four years was provided to establish a Social Impact Investing Sector Readiness Fund to enable organisations to develop new SII opportunities.
A fund administrator with experience in the SII market will deliver the Sector Readiness Fund. The fund administrator will identify and provide grants to support organisations bringing an investment opportunity to market.
Based on feedback from the SII sector, the federal government announced a broader scope for the Sector Readiness Fund in late 2017.
A grant round to select a fund administrator closed in June 2018 and the department is currently finalising this selection process.
The fund administrator is expected to be announced in the near future and Sector Readiness Fund grants are expected to become available in late 2018.
Partnering with states and territories
Funding of $10 million over 10 years is available to support partnerships with state and territory governments to develop social impact investments that help young people at risk of homelessness, as part of the government’s Housing Affordability Package.
Funding of $12 million over 10 years is available to support state and territory governments to trial social impact investments for other priority groups, to be identified through analysis of relevant Commonwealth, state and territory data.
Progress on implementing the 2017-18 budget measures
The DSS engaged consultants from Taylor Fry to develop an outcomes payment framework to underpin the implementation of SII partnerships with state and territory governments.
Taylor Fry, and their subcontractors Social Ventures Australia, have consulted with state and territory governments and completed a literature review to support the development of the framework.
Data linkage and analysis processes are also underway to improve the evidence base for the framework, with the framework due in late 2018.
The DSS has also engaged the University of Technology Sydney to undertake research on:
- the size and health of the SII market
- impact and outcomes across the market
- gaps and opportunities in the market.
In addition, the government is consulting with Impact Investing Australia to explore opportunities to leverage private sector capital and community sector engagement to increase the impact investment market in Australia to help tackle social issues.
About the author: Kyrn Stevens has executive experience across the non-profit, private, and government sectors, and completed an MBA thesis on social investing at Sydney Business School, University of Wollongong. He is a senior corporate affairs and marketing professional who has worked in legal services, for a federal regulatory authority, as well as for Australian Red Cross and in Indigenous health. He is also a non-executive director of the Fairy Meadow Community Bank Branch of Bendigo Bank. Contact him through LinkedIn: www.linkedin.com/in/kyrnstevens/