Applying for a SEDI Grant

The Social Enterprise Development Initiative (SEDI) was announced in the Australian Government’s 2023-24 Budget. SEDI is part of the Government’s Targeting Entrenched Disadvantage package.

SEDI capability building grants, valued at up to $120,000 each, support eligible social enterprises (Indigenous owned or controlled organisations with a defined social benefit) to build capability to grow their impact.

We know many Australian social enterprises have the potential to scale and increase their impact but need to build capability with assistance from intermediaries. We also know that scaling impact can be challenging and often intimidating. Support from capability building intermediaries can be invaluable for social enterprises – for instance to develop a fit-for-purpose business plan, build an Impact Measurement Framework or an impact investment financial model, learn how to record business data, measure and evaluate impact, market the organisation, or seek specialist legal advice. However, paying for such support can be challenging.

This is how a SEDI Grant can assist. Impact Investing Australia (IIA) provides SEDI Grants to mission-driven organisations to pay for the capability building support needed to scale and grow their impact.

Who can apply?

Eligible SEDI Grant applicants:

• Are a social enterprise (see definition below) or a trading Indigenous owned or controlled organisation with a defined social benefit
• Have a direct impact in one or more of the approved Department of Social Services (DSS) outcome areas (see Impact outcome areas below)
• Currently provide direct benefit to those experiencing entrenched disadvantage in Australia
• Are an Australian organisation
• Have beneficiaries who primarily reside in Australia
• Have a trading revenue that exceeds $50,000 per year
• May be early stage but have progressed beyond the start-up phase
• Are seeking to scale impact (now or in the future) in one or more of the approved outcome areas to address entrenched disadvantage in Australia

Definition: A social enterprise is a business that puts people and planet first. It trades like any other business but exists specifically to make the world a better place. A social enterprise seeks to solve a social or environmental problem. It can be a for-profit or non-profit organisation, or a charity that trades.

Notes:

• This is a competitive grants process. Meeting all the eligibility criteria is not a guarantee of being awarded a SEDI Grant.
• An eligible applicant must currently provide direct benefit to those experiencing entrenched disadvantage in Australia. An organisation is not eligible to apply if the only benefit being provided is indirect (e.g. your organisation supports social enterprises that are providing the direct benefit).

Impact outcome areas

To be eligible for a SEDI Grant, social enterprises must work in one or more of the DSS approved outcome areas.

What will a SEDI Grant fund?

Grant funds are to be used to purchase business and capability building services that will help a social enterprise grow its impact. These services are to be provided by intermediaries and must be completed within six months of a SEDI Grant being awarded.

The SEDI Grant application form includes a list of capability building services that social enterprises can choose from. This list of services is flexible and will change as the SEDI Grants Team learns more about what social enterprises need. Social enterprises can include other services (not included in the list) that will help grow their impact.

The types of services a social enterprise selects is dependent on its needs, but could include:

• Advice on systems implementation
• IT/HR/Inventory/Accounting
• Advice on financial management and reporting
• Advice on marketing strategy/materials preparation
• Advice on social procurement strategies
• Investor grant pitch development
• Introductions to impact investors or philanthropists
• Operations advice to assist in scaling operations
• Other capability building services to assist with scaling impact
• Internal costs necessary to purchase capability building services (to a maximum of 20% of total grant funding)

After receiving a SEDI Grant, it will be mandatory for the social enterprise to establish the following two documents during the project timeline (if not already in place):

• an Impact Measurement Framework
• a Business Plan

Note: Grant funding can be used by the social enterprise to have its capability building needs assessed by a provider/intermediary, after a SEDI Grant has been awarded. The list of capability building services, the chosen provider/s (intermediary/ies) and allocated budget the social enterprise identifies in its grant application can be changed, subject to approval by the SEDI Grants Team. No extra funding will be provided.

What will not be funded by a SEDI Grant?

SEDI Grants are to fund specific capability building services (see above). Grant funds cannot be used for general expenses, including:

1. Property: The Enterprise must not acquire or lease assets with SEDI Grant funds. This includes:
   • purchasing property, buildings or land
   • renovating or improving physical spaces
   • acquiring equipment or vehicles
2. Operating costs not necessary for the purchase of capability building services
   • salaries and wages for staff
   • IT systems, including upgrades and maintenance
   • rent or lease payments for offices or facility spaces
   • general utilities and office supplies
     (Note: Grant funds can be used to pay for internal costs necessary to purchase capability building services, to a maximum of 20% of total grant funding)
3. Indirect costs
   • administrative overheads unrelated to the capability building services funded by a SEDI Grant
4. Ineligible activities
   • activities or programs not directly related to the capability building services funded by a SEDI Grant
5. International travel costs not specifically approved by IIA

Timeframe of planning to scale

Enterprises should be able to clearly articulate their plans to scale and the length of time it will take. Plans to scale impact will go beyond the SEDI Grants timeline, therefore, enterprises should be able to demonstrate a pragmatic link between their capability building plans and the timeframe in creating and achieving the impact.

Link between capability plans and scaling impact

A capability plan should directly contribute to the enterprise’s plans to scale and grow impact. Clearly express your enterprise’s plans to scale impact, and what the expected impact will be. For example, the development of a social impact framework will define the intended impacts of the enterprise’s activities, its theory of change through which impact will be created and establish valid and reliable indicators.

Assessment criteria

The decision to award a SEDI Grant is made by the SEDI Grants Expert Panel. Panel decisions are informed following the assessment of the grant application and an interview with the applicant.

The Panel will consider a range of factors in determining whether to award a SEDI Grant, including:

• Does the social enterprise meet the grant eligibility? (See Who can apply? above)
• Will the capability building services that the social enterprise has proposed (which make up its Capability Plan) effectively and efficiently enable the social enterprise to scale its impact?
• What is the likely additional impact of the enterprise’s scaling plans on people living in Australia experiencing entrenched disadvantage, compared to them not receiving the grant funds?
• Will the enterprise be able to manage the grant project and associated finances?
• Will the grant assist in developing the social enterprise and social impact investing ecosystems?

Applicants are notified of the outcome by IIA’s SEDI Grants Team.