Challenge launches with $170 million in philanthropic investments

Challenge launches with $170 million in philanthropic investments

Message from IIA CEO 

We’re pleased to share our latest quarterly updates, highlighting the projects we’re launching, events we’re attending and international news we’re following.

IIA is pleased to be administering the inaugural Endowments for Impact Challenge, launched this week. We’re calling on Australian investment advisers to register their interest in this first-of-its kind competition, with philanthropic trusts and foundations seeking assistance with investing a combined $170 million.

We have continued to participate in events across the country – from regional Australia to metropolitan areas – showcasing the recent progress and new initiatives delivering significant positive effects on people and the planet.

We’re also keenly following impact news around the world. Pleasingly, the sector continues to grow globally, with more being done to advance frameworks that assess the outcomes. News on this and more is detailed below.

As always, we thank you for your ongoing support of our work and the contribution you’re making to create meaningful impact through investments.

Best wishes
David

David Hetherington, CEO
Impact Investing Australia

Challenge launches with $170 million in philanthropic investments

The Endowments for Impact Challenge is a pioneering initiative set to reshape philanthropic investment in Australia. This first-of-its-kind open tender competition initiated by six of Australia’s leading philanthropic trusts and foundations invites investment advisors to showcase innovative strategies for aligning charitable endowments with responsible mission-driven investment practices. The participating trusts and foundations are seeking investment advisors to assist them in managing a combined investment pool exceeding $170 million.

The Challenge encourages advisors to lead the way in transforming how trusts and foundations manage their assets for maximum social and environmental impact with the purpose of:

  • showcasing the demand for credible mission-driven investment advice among Australian philanthropic trusts and foundations
  • assisting in the engagement and evaluation of financial professionals for effective investment mandates
  • inspiring innovative approaches to responsible mission-driven investment practices
  • promoting collaboration and transparency within the investment strategies of trusts and foundations

Participating trusts and foundations include Besen Family Foundation, Dusseldorp Forum, Inner North Community Foundation, Northern Rivers Community Foundation, Oranges & Sardines Foundation, and Reichstein Foundation.

As supporters of the Challenge, Community Foundations Australia, Paul Ramsay Foundation, Grace and Emilio Foundation, Australian Communities Foundation and Fouress Foundation will be keenly following the outcomes.

David Hetherington, CEO of Impact Investing Australia, said: “We’re calling on investment advisors to register now for the Challenge, which represents an exciting opportunity to showcase their expertise in responsible investing that not only meets the financial goals but also advances the missions of these philanthropic organisations.”

“This is an important initiative for philanthropy in Australia, as we seek partners who can support us to better align our investments with our values and spark collaboration to elevate the standard of investment advice in the sector,” Rachel Ball, CEO of Reichstein Foundation said.

Key details:

  • Registration: Investment advisors (Australian Financial Services licensees) can register their interest in the Challenge at endowmentsforimpactchallenge.com
  • Timeline: Request for Proposals will be sent to registered advisors, with proposals accepted from 20 November to 18 December 2024. Shortlisted finalists will be invited to present their proposals to the trusts and foundations (as well as other stakeholders in the philanthropic and community sectors) at a town hall event in Sydney on 27 March 2025.
  • Final report: A report capturing key findings and recommendations will be published in 2025 and shared widely with the philanthropic and financial sectors.

This inaugural Challenge is poised to drive significant change in how charitable assets are managed in Australia, offering investment advisors a meaningful opportunity to contribute to social and environmental impact.

For more information and to register, visit endowmentsforimpactchallenge.com

Events

Regional impact matters

The northern New South Wales town of Kempsey hosted the third annual Social Impact in the Regions conference last month, providing a valuable opportunity for changemakers to connect, learn and be inspired by the social impact stories from regional and remote communities. This year’s event focused on social impact funding models, measurement, enterprise development and community engagement.

In his presentation, our CEO, David Hetherington shared updates on impact investing and details of the Social Enterprise Development Initiative (SEDI) Grants program, which has a particular focus on regional and First Nations social enterprises.

Next year’s conference promises an exciting lineup of masterclasses, workshops and opportunities to network with peers. You can keep updated on the 2025 Social Impact in the Regions here. Regional and First Nations social enterprises interested in the SEDI Grants program can find details here.

IIA CEA David Hetherington presenting at Impact in the Regions
IIA CEA David Hetherington presenting at Impact in the Regions

Institutional investors and impact investing – navigating the future

In our continuing series with Melbourne University, we held a webinar to explore the way forward for institutional investors and impact investing. The panel discussed how some investors view sustainability issues like climate change as risks to financial returns if not mitigated, while others see opportunities in new sectors and technologies that benefit communities and the planet.

Panel members discussed the search for a ‘sweet spot’ where investors can thread the needle, finding impactful investments with commercial risk-adjusted returns while fulfilling their fiduciary duties. They debated whether institutional investors are only embracing impact as an insurance or risk mitigant, and whether there was in fact a range of existing impactful investment opportunities that just aren’t being described as impact investment.

Panellists included Kerry Series from NorthStar ImpactTom Gosling from London Business School and European Corporate Governance Institute and Dr. Arjuna Dibley from the Sustainable Finance Hub at Melbourne Climate Futures.

If you’d like to know more, or want updates on our future webinars, reach out to us at: comms@impactinvestingaustralia.com

International news

Valuing impacts to drive better decisions

More than 200 influential investors, business leaders, academics and environmental organisations convened during Climate Week NYC last month. They met for The International Foundation for the Valuing Impacts’ (IFVI) release of environmental factors that lay the foundation for impact accounting, allowing environmental impact metrics to be expressed in monetary terms. This global release of 100,000+ environmental value factors covers 430 different environmental impacts across 268 geographic locations.

The event underscored the arrival of impact accounting, a concept crucial for understanding the true value of investments. Key speakers included Sir Ronald Cohen (Chair, IFVI and President, GSG Impact), Gordon Brown (former UK Prime Minister) and Nick Hurd (Chair, GSG Impact and the Impact Task Force), who addressed the need for standardised measurement of environmental impacts.

Sir Ronald drew parallels between today’s investment landscape and the aftermath of the 1929 crash, emphasising that just as GAAP accounting transformed financial reporting, impact accounting is essential for making informed decisions about social and environmental investments. He noted that without a reliable measurement system, significant funds are invested in companies with unclear impacts, and by creating robust datasets, investors can better assess risks and opportunities within industries.

Read more on this initiative and sign up to IFVI updates

Global impact investing grows by 14% p.a. over the last five years

The Global Impact Investing Network’s latest market intelligence report reveals the global impact investing market has continued to grow over the past five years, reflecting a maturing market as more investors prioritise impactful strategies across sectors and geographies. Highlights of the report include:

  • Steady growth in impact investing assets: At 14% compound annual growth over the past five years, there is continuous growth in the assets allocated to impact investing strategies.
  • The rise of equity-like debt and public asset classes: Investors are leveraging the unique features of these asset classes to derive value, indicating a strategic shift in how capital is deployed.
  • Satisfaction with financial performance despite unmet targets: Investors report high satisfaction with financial performance, even when targets are not met.
  • Key shifts in measurement and management of impact results: Investors are experiencing fragmentation in the choice of frameworks and metrics for measuring impact, likely influenced by evolving regulatory environments. Despite this, over two-thirds of investors are incorporating impact criteria into their investment governance documents. In addition, there is a growing trend among investors to subject their impact management processes to third-party verification.

The report provides insights into the growth and demographics of impact investing, including capital allocation, investment performance, and evolving impact measurement practices for both newcomers and seasoned investors. Read the report

Global impact investing grows by 14% p.a. over the last five years