Executive Director of Social Investment
Wendy Haigh is a pioneer in social innovation and utilising finance as a tool to scale social impact. With a foundation in accountancy and a career spanning diverse sectors in executive positions, Wendy has played a central role in delivering a number of landmark impact investing initiatives for The Benevolent Society, and is focused on developing new opportunities to transform social service delivery in Australia.
The Benevolent Society has participated in various pioneering impact investments, from the Goodstart consortium to being an investee and an investor in Australia’s first social impact bonds. What have been some of the benefits of being part of these initiatives and challenges for the organisation?
The major benefit of our impact investments is that they’ve provided new sources of funding to address pressing and largely unmet social needs, and enabled us to create more social impact where it’s needed most.
The Benevolent Society is a big advocate of acting early to prevent entrenched disadvantage for young children so it’s been very rewarding to see the growth of Goodstart – which now runs 650 or so early learning centres – and the great work they do delivering quality early childhood education and care for families and the community. Goodstart has also become recognised as a leading voice on early learning in Australia and that in turn creates further opportunities for social impact through social policy and childcare reform.
Equally, the NSW Government’s two Social Benefit Bond pilots, one run by us and the other by Uniting Care—are having a significant, measurable impact in the lives of children and families each day. The Benevolent Society invested in both the Uniting Care Burnside Newpin Bond which works on restoring children in out-of-home-care back to their families and our own Social Benefit Bond, which works with at risk families to increase safety and prevent children from entering into foster care. There are more than 55,000 children in foster care in Australia and more than 40,000 children involved in substantiated cases of abuse or neglect every year. There’s a huge need for intensive family support services like ours but a huge percentage of it of it goes unmet. So the social benefit of providing specialised services to intervene and support families at risk is enormous.
The other benefit that’s definitely worth mentioning is that our impact investments are delivering financially. Goodstart has been returning 15% p.a. for several years and is scheduled to continue for a few more years. Our Newpin investment returned 7.5% in its first year. Our own Bond doesn’t pay a return until the end of 5 years but is already showing good interim results.
A major challenge for us in being part of these initiatives has to do with the work involved in making new and complex investment vehicles work, with multiple partners across the public, private and community sectors. It’s a process that takes lots of time, lots of data, lots of different skills and lots of negotiation. Everyone comes with different assumptions and ways of working despite our shared purpose. Nothing happens overnight and it can be difficult work. It took two years for us to complete all the paperwork for the Social Benefit Bond. But really this is a breeze compared to the challenges our frontline workers face each day. And this is where the biggest challenges lie for impact investments—in the work that they fund. It is not easy to turn around the lives of families who have experienced entrenched disadvantage. It takes a lot of hard work over a long time.
Why do you see impact investing as important for the social sector as a whole?
I think impact investing is enormously important for a number of reasons. Firstly because it opens up new sources of funding to address social needs that governments are struggling to meet. It’s enabling us to deliver services that wouldn’t otherwise be available, or affordable by government.
Secondly, because it’s pushing the sector to work in new, innovative ways to improve practice and performance. With the shift from reporting on service outputs—‘how much are we doing?’—to client and community outcomes—‘is anyone better off?’—we’re able to demonstrate the effectiveness of the work and prove its value, both socially and financially.
If The Benevolent Society’s Social Benefit Bond is successful it will deliver tangible evidence of best practice approaches to improve the home environment and parenting abilities in families at risk of having their children removed into out-of-home care. So this will guide the direction for future practice as well as funding. It’s a hugely significant development in this respect. By making the results of our own Bond publicly available, our hope is that more people will see the opportunity to participate in the development and funding of social impact investments generally.
Central to impact investment is the ability to collect data and be accountable around outcomes – what works and what doesn’t work. How has this influenced the way you operate as an organisation?
The Benevolent Society is fortunate to have a Research and Evaluation team that has collected data and measured outcomes for several years, so that hasn’t changed. What has changed with our Social Benefit Bond is that we now have access to live data from the Department of Family and Community Services on our Resilient Families program clients on an ongoing basis. This means we not only ensure we get the right families get referred to us in the first place, but we are also able to adjust our program as we go in response—and it’s already leading directly to improvements in practice. There’s a flexibility we don’t have under traditional funding contract requirements.
We are also tracking data on our clients over a long period of time. The Social Benefit Bond runs for five years and, for the first time ever in an Australian intensive families support service, we will have data on our clients after twelve months—after they’ve left the program. So we can reconnect with them if required. This is a major breakthrough.
Do you see opportunities for smaller not for profit organisations around impact investing or do they risk being left behind?
Yes, I think there are opportunities for smaller not-for-profit organisations around impact investing.
It’s true that Social Benefit Bonds are costly to develop—you are looking at a ballpark figure of around $200,000, depending on the complexity of the proposal—so the capacity of smaller organisations will be limited, but one solution is to get pro-bono assistance from professional service providers and experts—as long you can demonstrate savings to government from your service—and partner with other organisations (as we have done on several occasions).
At The Benevolent Society we welcome initiatives to make pro-bono experts and funding available so that smaller not-for-profits are not excluded from participating. A Social Benefit Bond would represent a great opportunity for a well-run small organisation to significantly expand its footprint or join other organisations to provide a mix of services.
Organisations like Social Enterprise Finance Australia (SEFA) also provide tailored financing solutions that encourage smaller social enterprises to develop and grow.
‘Multilingual leadership’ capacity is often talked about in the context of designing and delivering successful impact investments. What skills do you see as important to build within the Benevolent Society to create and realise more opportunities in this space?
Yes, I certainly agree that impact investments require all parties to learn a new common language. They require give and take and an ability to see things from other points of view. The needs of private investors and the major banks are quite different from government, not for profit organisations and our clients. For our Bond, we were very pleased to have both Westpac and Commonwealth Bank of Australia on our side to help with the design of our investment asset classes. Equally, I am sure they have learnt a lot on the ethics of a randomised control trial—which is not something that comes up in everyday banking.
As well as keeping up with what’s happening internationally and learning from other great examples around the world, I think there’s a range of critical skills we need to build at The Benevolent Society to create and realise more opportunities in this space. They are skills in: co-design, risk-sharing, cross-sector collaboration, creative thinking, cost benefit analysis, gap analysis, investor relations and investor reporting. But most of all I think we need leadership and innovation skills.
You’ve had a role change from the Benevolent’s Chief Finance Officer to the new position of Executive Director of Social Investment. What led to the creation of this new leadership role?
The Benevolent Society has a long history of being ahead of the curve on social impact innovation—from its earliest days of pioneering philanthropic support for the marginalised poor in colonial Sydney, to lobbying for the old age pension, child labour laws and legal aid. So you could say this is in our DNA. We started the nation’s first centre for social leadership 16 years ago in 1999, and in 2002 we partnered with The Smith Family, WorkVentures and the AMP Foundation to establish Social Ventures Australia. So our role spearheading social impact investing in Australia is really just the latest in a long record of commitment to working at the cutting edge of new developments to deliver social change.
We see social impact investment as of strategic importance, to us and to the country, both in terms of funding but most importantly in terms of social impact. I feel very privileged to have the time now to devote to this space and to deliver on our social investment strategy.
There is a lot of work to do to generate new impact investments, to build the market and to review other investment opportunities. Already I am finding there aren’t enough hours in the day but it’s such an exciting time.
What advice do you give to your peers working for other organisations keen to explore how they might harness private investment to further their mission?
My advice to others is dive in! You can talk to government agencies such as the Office of Social Impact in NSW. You can talk to independent expert advisors through the Expert Advisory Group. You can talk to us and to the other organisations like Social Ventures Australia or Uniting Care Burnside. Everyone is willing to share their knowledge in every experience and help others get started. It’s in all our interests to build the market here in Australia.
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