Resource Category:

Impact investing

Social Impact Bonds: The best of all worlds?

The ‘innovative finance’ model of Social Impact Bonds (SIBs) is being hailed as an answer to funding critical social problems. In this article, Associate Professor Public Governance Helen Dickinson looks at the hype and potential of SIBs and if they really are the best of all worlds.

Buy Social: Delivering social impact through purchasing

Our purchasing decisions influence the way that supply chains develop. Seeking the lowest price at all costs can result in supply chains with layers of hidden costs through damage to the environment and to the communities involved in that supply chain. However, there are great examples where buyers have changed supply chains in order to deliver positive social outcomes. One example of this has been in coffee. When enough consumers chose to buy Fair Trade coffee, roasters altered their supply chain to accommodate demand and in so doing raised the wage levels and working conditions of coffee farmers and the communities that they live in. As demand for Fair Trade coffee increased, production became more efficient and price declined. Fair Trade coffee now provides good coffee at competitive market prices while generating positive social outcomes. Whether you buy for government, business or simply yourself as an individual consumer you have the power to change supply chains to generate social impact.

Mind the Gap: Why social enterprise in Australia needs more than impact investment

Of late there has been a lot of enthusiasm for the development of an impact investment market in Australia. Social Traders is keen to highlight that impact investment – that generates social impact and financial return – is not synonymous with social enterprise.  Nor is developing an impact investment market the answer for the provision of capital for all social enterprises in Australia. Our experience, over the last five years, in social enterprise development and investment, coupled with examination of the more developed market in the UK, sounds a warning to those who believe that impact investment capital alone is the answer for supporting social enterprises in Australia. Australia’s nascent social enterprise market requires a carefully blended mix of capital and support if we are to see a full spectrum of social enterprises realising their potential in this country. You can conceptualise the capital available for Australian social enterprises as a continuum: At one end we have donation/grant capital, mainly provided by philanthropy and government, and to a smaller degree crowd-funding, and at the other end, we have impact investment - money to deliver social good with the expectation of a financial return - and, a little further along the continuum, commercial finance.

The Potential and Limitations of Impact Bonds

This report from the Brookings Institution examines the lessons from the first five years of experience worldwide. Visit the webpage here or download the report ThePotential+LimitationsofImpactBonds.

Business Planning Guide for Social Enterprise

What is a social enterprise? Social enterprises are businesses that trade for a specific social, environmental or cultural purpose. Like all businesses, social enterprises operate in commercial markets, generating a profit from their trade. However, unlike other businesses, social enterprises exist to fulfil their overriding and specific social purpose and this is at the heart of every social enterprise, driving everything it does. Around the world social enterprises have lots of different kinds of social, environmental and cultural purposes, reflecting the diverse needs and interests of the communities they work in. This guide focuses on social enterprises in Australia that provide employment for people who are excluded from the labour market. Of course, many of the principles will also be useful for other social enterprises. Who is this guide for? The guide is primarily aimed at people and/ or organisations interested in starting a social enterprise and who don’t have experience of doing this before. It is a step-by-step guide to thinking about, researching, planning for, starting and then growing a social enterprise, which will help you to:
  • create a rigorous business plan for a sustainable social enterprise  
  • obtain support for your social enterprise e.g. from partners
  • secure investment for your social enterprise  
  • monitor and evolve your social enterprise in future years
It is also designed to be a useful resource for more experienced practitioners, acting as a reference point and refresher. How to use this guide This guide focuses on the extra things that you need to think about to develop a social enterprise compared to a straightforward commercial business. It should be used in conjunction with standard business planning guidance. 

Is your program suitable for a social impact bond?

Is your program suitable for a social impact bond? A practical guide to help you self-assess your program’s appropriateness for a social impact bond (SIB). The social impact bond (SIB) innovation is gathering pace around the world and here in Australia, but it is still very early in the development of this nascent market. Expectations are high – from investors and service providers alike – but implemented contracts are thin on the ground, and players are learning on the job when new SIBs are developed. …the reality is that they are not a suitable funding instrument for all social programs. With two state governments having taken their first steps in trialling SIBs, many organisations are actively considering whether a SIB would suit their program. The allure of long term, large scale funding for a program is understandable, however there are many stars that need to align for a SIB to be viable. While SVA believes SIBs have the potential to provide significant benefits to governments, service providers and investors alike, the reality is that they are not a suitable funding instrument for all social programs. This article provides key questions that organisations thinking of embarking on the SIB journey should consider, and viability ‘rules of thumb’ for those questions.

Social Return on Investment – lessons learned in Australia

This report was commissioned by the Investing in Impact Partnership (hereafter referred to as ‘the Partnership’) to assess the current state of play of SROI in Australia today. The partners are: the Centre for Social Impact (CSI); PricewaterhouseCoopers (PwC); and Social Ventures Australia (SVA). The main objectives of the Partnership were to increase the understanding of SROI as an impact measurement approach, improve the evidence base of impact for employment creating social enterprises, and improve the transparency of non-profit organisations reporting on their impact. Access the report online here or download SROI-Lessons-learned-in-Australia.

Social Traders: The Social Enterprise BUILDER

The Social Enterprise Builder is Social Traders' online tool to assist those starting a social enterprise. This is an online step-by-step guide includes templates, worksheets and activities for the various stages of social enterprise development.

Technical Guide to developing social impact bonds (2013)

Social Finance Guide to developing social impact bonds Social Finance is a not for profit organisation that brings together finance, social and governmental expertise to redesign public services. Where necessary we help to bring in social investors who can provide finance and take on delivery risks to enable the implementation of innovative new models. Since late 2007 when we started to develop the Social Impact Bond (SIB) idea, we have worked with HM Treasury, Ministry of Justice, the Department for Communities and Local Government, Home Office, Department for Work and Pensions, Cabinet Office and a variety of local authorities to assess and create models in different issue areas. This guide draws on our experience to date in exploring the feasibility of SIBs, particularly in the area of Children’s Services. Social Finance worked with Essex County Council to develop and launch the first local authority-commissioned SIB in November 2012. The Essex SIB focuses on vulnerable adolescents at the edge of care or custody and funds intensive intervention in order to reduce the time they spend in care or custody and enable them to stay “safely” at home with their families if possible.