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.

External Link: http://www.socialtraders.com.au/news-and-events/fx-articles.cfm?loadref=118&id=97