Action

Impact Investing Australia is driving the establishment of five flagship initiatives designed to accelerate the development of the market in Australia and help to remove existing barriers.

These five initiatives are focused on growing capital; achieving more innovation and better outcomes; and market building.

They are identified in the Australian Advisory Board on Impact Investings Strategy Delivering on Impact as the best place to start in growing the impact investing market.

Working groups with participants spanning multiple sectors are in the process of scoping, designing and delivering these initiatives. Working groups first came together in late-2014, and implementation is scheduled to commence late-2015.

Flagship initiative 1:   

Establishment of an ‘Australian Social Impact Fund’ with $350 million in seed capital to stimulate impact investing activity and encourage new market participants.

Why do we need this?

We need an independent long-term platform with a large amount of capital for investing in innovative approaches to addressing Australia’s social and environmental challenges.

This pool of funds is critical for focusing greater attention on impact investing and demonstrating the different financing opportunities for organisations with a social purpose. This fund aims to increase participation from a diverse range of investors, and enable larger and more efficient transactions.

Impact investing offers organisations with a social or environmental purpose a range of new opportunities for diversifying funding. It also requires an additional set of skills to attract different forms of investment and to compete more effectively for contracts. The more enterprises that are ‘investment ready’, the more quality impact investment opportunities there will be.

In March 2015, NAB launched Australias first Impact Investment Readiness Fund  in partnership with Impact Investing Australia. An initial amount of $1 million is available to provide mission-driven organisations with targeted advice and support to help them secure investment for scaling up their social or environmental impact.

Publish government costs for 3-6 key social issues.

Why do we need this?

Social innovation is central to impact investing, bringing new ways to address the societal challenges we face in addition to generating new avenues of capital.

Capturing the costs of key social issues to taxpayers signals where there is clear room for improvement and assists comparability of different social interventions for their value and effectiveness.

Publicly available data that shows government costs helps create a baseline against which improvements in social outcomes and their value can be measured.   This data can be used to encourage innovative solutions and assists governments and organisations with a social purpose to design impact investment opportunities such as social impact bonds.