What it means to approach philanthropy as a social investment
16 February 2022 at 5:52 pm
We sit down with Emily Fuller, Future Generation’s social impact manager, to find out about the company’s approach to giving and the value they see in investing in organisations not just programs.
This year Future Generation Global decided to change its social investment strategy.
Since first launching in Australia six years ago, the internationally focused listed investment company has aimed to deliver both investment and social return – shareholders get a diversified exposure to selected global fund managers, while 1 per cent of net tangible assets each year is given to charities to help change the lives of young Australians affected by mental illness.
But after investing more than $18 million in a range of activities across the mental health spectrum since 2016, the company has now identified prevention as where its contribution can “punch above its weight” in positively impacting youth mental health in Australia.
To that end, this month it opened up expressions of interest for the first time for partnerships with prevention-focused not for profits.
The aim is to provide their chosen partners with multi-year funding and additional capacity building support, tailored to each organisation’s circumstances.
The company will also work with their partners to track outcomes, learnings and share widely.
The approach is reflective of Future Generation’s ethos of approaching philanthropy as social investment.
Emily Fuller, Future Generation’s social impact manager, told Pro Bono News they could see a real value-add by investing in organisations rather than programs, which is the predominant approach of donors.
She said so often charities were forced to spend all of their money on programs, rather than spending on organisational systems that would allow them to work more efficiently, scale faster and gather data about what’s working.
“We see value in funding core operations and organisational development, because it strengthens all programs and ultimately, the outcomes for young people,” Fuller said.
She attributes that attitude to the company’s investment background.
“We were started by a funds management business. The idea of investing in an organisation as opposed to a program makes sense. You don’t invest in a certain part of Google, you invest in the whole thing,” she says.
“When we looked at our strategy, we looked at the ‘what’ we’ll invest in, but also the ‘how’ we’ll invest.
“That sort of investment at an organisational level is clearly where those dollars are the most valuable and the hardest to get.”
She said she believed investing at an organisational level has the longest tail impact – ultimately strengthening the next generation of organisations within a sector.
“When you’re a funder that is your direct impact, your indirect impact is then ultimately what [your partner] does and their impact with their clients,” she said.
“It’s also a vote of confidence in the organisation’s work which gives a real non-financial boost.”
Fuller says she is amazed that more philanthropists don’t fund at this level.
“I think everyone should be doing it,” she said.
“You don’t want to tell other people how to do things and lots of people have long histories of doing great things with programs. But I think it makes sense for an investment company to invest in organisations in this way, and we would certainly encourage others to do it.”
A key element to the new strategy is the development of an impact framework that Fuller hopes will contribute to the evidence base of why it is good for funders to invest at an organisational level.
She says at the moment there is a lack of evidence around the impact it can have.
“People often say, ‘Oh can you show that you’ve done that?’ But it’s not about us showing that we’ve done it, it’s happened. Who is responsible for it is rarely linear,” she said.
“We think if we’ve got good processes in place and a good relationship with the organisation, we can make sure the funding is directed in a way that is useful to them in their development.
“Hopefully we contribute something in terms of methodology to the philanthropic sector as well.”
Fuller said Australia had a long history of philanthropy pioneering new ways of doing things. In particular, she highlighted the Colonial Foundation’s seed funding in 2001 for Professor Patrick McGorry AO’s work at Orygen on early intervention which led to global advances in the evidence around efficacy, and subsequent proliferation of early intervention programs.
“We see our greatest opportunity as investing in the next frontier of wellbeing and prevention, building young people’s resilience and stopping mental health issues developing in the first place,” she said.
“We want to invest in stemming the tsunami of young people requiring care in the mental health system.”
There are two tiers of partnerships, the first providing a $400,000 to $600,000 per annum investment for a minimum of three years, with a second tier of a $140,000 to $200,000 per annum investment for a minimum of two years.
But Fuller says the numbers are estimates at this stage as it will depend on the model and financial performance of the organisations.
In terms of what they are looking for in a partner, Fuller says there are a number of things that include ambition, a collective spirit, and a willingness to do something new, participate in impact measurement and generate evidence.
She says it is also essential that the organisation is championing young people and has opportunities for young people themselves to direct the work as well as be recipients of it.
“But the sweet spot for us, is that whatever the organisation is doing aligns with the basic evidence of what we know are good things to do for wellbeing and prevention,” she said.
Expressions of interest are open until 1 March.
You can find more information here.