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Rapid response vehicle finds post-COVID jobs for young Australians

6 May 2020 at 8:31 am
Wendy Williams
Foundations or individuals can either grant or lend money

Wendy Williams | 6 May 2020 at 8:31 am


Rapid response vehicle finds post-COVID jobs for young Australians
6 May 2020 at 8:31 am

Foundations or individuals can either grant or lend money

With Australia facing an unprecedented employment crisis, a Queensland social enterprise has launched a new social finance vehicle to help create post-COVID jobs for young disadvantaged Australians.

White Box Enterprises, founded by serial social entrepreneur Luke Terry, builds and supports large-scale employment-focused social enterprises with the aim of creating 5,000 jobs by 2030.

In response to COVID-19, the organisation is now seeking to identify commercial opportunities arising from the post-COVID economy that will provide sustainable return to work opportunities for disadvantaged young people, including refugees and asylum seekers, Indigenous Australians, people with mental health issues, ex-offenders and those living with a disability.

It is also providing an innovative finance vehicle where foundations or individuals can either grant or lend money via White Box Finance which is a DGR1 entity. The funding provides catalytic capital to help create and find opportunities that are going to save or create jobs.

Investment expert Josh Ackman does pro bono work for White Box and sits on the investment committee doing due diligence on each opportunity to ensure it maximises and balances jobs created/saved, and the probability of getting capital back. 

He told Pro Bono News the rapid response vehicle was effectively just trying to make it easy for people.

“Some people don’t want to make a grant at this stage but they are happy to do a loan, if they can get their money back,” Ackman says.

“Other people are saying, look I don’t have time to think through the structural complexity of how that works in a loan, but I’m happy to make a donation and have a real impact now, and maximise employment opportunities.”

The fund is structured so the donations are junior to the loans, which will be repaid over three years.

Ackman uses the example of Hotel Housekeeping, one of the social enterprises created by White Box, to highlight the opportunities. 

Following a drop off in work due to the fall in tourism, the organisation, which creates employment for refugees in hotel housekeeping jobs and has contracts with Accor, has pivoted and is pitching for new contracts such as providing sterilisation and cleaning services.

This requires funding to both find and create the new opportunity, and then to buy things such personal protective equipment and cleaning supplies.

But with an investment of around $50,000 it could save or create up to 150 jobs for refugees. 

At the end of a three year period, to the extent that there is a financial loss, this will come out of the grant funding. Investors who have made a loan will get their money back, and remaining funds will be reinvested and leveraged into the future.

Ackman said the model was quite unusual, but had been structured that way to give people flexibility.

“Because we are trying to balance impact with financial viability, we’re accepting there will be some situations where a grant is more appropriate than a loan,” he said.

But he hopes having an institutional quality investment committee doing due diligence will give investors comfort that the money will be directed into the right hands.

He said it was important to note that impact was at the heart of the scheme.

“We’re not just looking at this and doing hard financial due diligence, we’re doing hard impact due diligence as well. It is a balance,” he said.

“We’re not going to be cut-throat commercial about it, if there is some 50 per cent chance we may lose our money but it is creating 250 new jobs, then that is a trade-off worth making.”

Wendy Williams  |  Editor  |  @WendyAnWilliams

Wendy Williams is a journalist specialising in the not-for-profit sector and broader social economy. She has been the editor of Pro Bono News since 2018.

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