Number of staff: 110 employees plus 430 active volunteers
Family Life is an entrepreneurial community organisation working to strengthen families and promote well-being across society through community development and engagement activities, partnerships, and specialised services. Research, enterprise and innovation are central to Family Life’s approach to getting to the root cause of social problems, whilst responding to immediate needs, and delivering measurable social change and impact.
Family Life has harnessed impact investing in different contexts including accessing finance to purchase property for the creation of a community hub, as well as securing investment to expand its social enterprises. In addition, Family Life is a partner of Impact Investing Australia, actively contributing to helping grow the opportunities for impact investing in Australia.
We engaged CEO Jo Cavanagh OAM to tell us about the organisation and its relationship with social innovation and impact investment.
What have been the main drivers and motivations for Family Life to explore impact investing?
Family Life’s mission seeks to move beyond responding to the needs, problems and crises experienced by families, children and young people, and to get to the root causes of disadvantage and vulnerabilities. This requires independent income and investment in evidence informed activities to design new approaches; approaches which are innovative and seek to contribute to personal, community, systems and structural change. These aspirations tend to be outside the scope of government funding contracts. Further, as a SME-level community organisation, we do not have invested reserves to fund research and innovation. Hence, Family Life has been proactive in developing a diverse financing strategy to engage with various forms of impact investing including for asset acquisition, income earning, and payment for results or social impact bonds.
Can you give us some examples of Family Life using impact investing to help deliver positive social change? What role has private capital played alongside other sources of finance such as donations and income from social enterprises?
I’ll talk about two examples, Tootgarook Community House and social enterprise
Tootgarook Community House
Family Life has developed a whole of community, place based service model providing integrated wrap-around services for the most vulnerable families and children. Through external research and internal program evaluation, we gathered evidence to support a replication and transfer from a high need bayside neighbourhood, to an area of equivalent need on the Mornington Peninsular. Central to the model is a safe community place for engaging parents and children: a community house where volunteers and local community members work with specialist staff to create a context of trust and healthy relationships. Whilst volunteers support and empower isolated and marginalised parents with practical help and activities, specialist staff provide ‘light touch’ therapeutic interventions. This model places family support services within a community context to address problems and promote well-being for children to remain safely in the care of their families.
Family Life set out to meet the evidence of community need in the Rosebud West and Tootgarook communities with a neighbourhood-based replication of our successful bayside model. In the absence of an appropriate safe place, we needed to provide one. Through a loan from Foresters Community Finance, we were able to purchase a well positioned house, across the road from the local primary school and near to the Maternal and Child Health Centre. A mix of government funded services were allocated to initiate services from the house, and further trust, donors, community groups and local government support has been raised to support our strategy for sustainability.
A Community Advisory Committee, reporting to the Family Life Board, now provides local leadership and governance, local community engagement continues to grow with a weekly program of services, and activities are integrated with local groups.
Most recently, through our advocacy with the office of Minister Mikakos, a group of senior staff from the Victorian Department of Health and Human Services visited to learn about how this community embedded model of family support can provide an alternative pathway for families currently engaged in the child protection and out-of-home care service system. An investment of up to $3000, for an intensive family support service, is a high impact alternative to disrupt the pathway into tertiary end services which range in cost from $55,000 to $200,000 for child protection investigations, foster care placements and residential care.
This strategic impact investment loan has helped us leverage further contributions, ultimately enabling us to deliver positive measurable outcomes which can be replicated and scaled.
Social enterprise – opportunity shops
The foundation volunteers of Family Life established a family service in 1970, and a community business – an opportunity shop – to raise funds to support that service in 1971. When Family Life needed to respond to enabling employment for young people who were homeless or disengaged from school, we replicated the Op Shop into a social enterprise retail store where young people could learn retail skills and be supported by trained volunteers to find and maintain employment.
Once again this model was embedded in community and outside the scope of government funded services, so Family Life need to generate income to test and evaluate to the model for effectiveness and scaling.
Two successful replications were achieved in Cheltenham and Chelsea. One failed in Frankston due to lack of volunteers. And then government cuts to TAFE eliminated the subsidy which supported the training.
Family Life needed to increase our social enterprise income and provide more training opportunities for the long-term unemployed, new arrivals and young people with a range of needs including disabilities and learning difficulties.
Our strategy was to relocate the original Op Shop to a larger more commercially viable location within the communities where we could attract volunteers, and increase our income to support the employment program PeopleWorx.
Community finance was again successfully secured to enable Family Life to purchase the right property when it became available, add a further asset to our balance sheet, and increase our social enterprise income with the purchase of a double fronted shop in nearby Highett. On this occasion, financial institutions were competing for our business, leading to beneficial interest rate negotiations.
With careful management, we scaled back PeopleWorx until we could open the new enterprise which is now thriving and delivering better than budget results. PeopleWorx is slowly being scaled up, and whilst not yet back to our previous 200 participants per year, this target is within our sights.
Disengaged and unemployed youth represent a significant missed opportunity for strengthening the future of our whole society with a increasingly ageing population. Australia needs to enable every young person and adult to contribute for personal health and well-being benefits, as well as for tax savings and tax contributions.
What journey have you been on with your Board in relationship to diversifying your income streams and using impact investing as a tool?
Working towards diversified income streams became part of the Family Life strategic plan in 2000. Attracting larger trust income was followed by increasing our social enterprise/earned income. The role of asset growth as part of sustainability planning was a more involved and elongated process. The Board engaged in professional development to inform a policy development process which lead to unanimous agreement that property acquisition for achieving our mission could be included in our sustainability strategy.
The pathway to property acquisition became possible for Family Life as a community charity with the emergence of community finance funds through the Social Enterprise Development Investment Fund. The due diligence process with Foresters Community Finance was extremely valuable in providing comfort for the Board that Family Life was in fact in a strong financial and management position for borrowing to purchase property.
What kind of processes have you been through to make initiatives attractive to investors? Have you built your in-house expertise or sought external support?
Since 2003 Family Life has grown our internal investment in the development of evaluation and research capability, and established strong external partnerships with universities for specific research projects. Today we have an organisation-wide ‘Outcomes Framework’ which informs our data collection and management system.
We have concurrently grown our learning culture for feedback and program review with staff, leading to increased accountability and measurement of our program impact.
Family Life is a pioneer in exploring social return on investment and developing our own innovative process for developing community impact statements to demonstrate measurable value created and costs saved. Our approach aligned to the model evolving at REDF to calculate service unit costs and estimate the cost of alternative pathways if goals of change are not achieved, or problem escalation is not prevented.
This work has been redirected into investing collectively with like-minded community organisations to support Impact Investment Australia to develop an aligned national approach for measuring and reporting performance. We see the relationship with Impact Investing Australia as enabling the next stage of learning for business case development to attract investors, as well as meeting our mission objectives for sharing learning and enabling sector growth and performance improvement.
How do you see the relationship between social innovation and impact investing?
In our experience, government and trust funds are largely risk averse, with either limited interest or ability to invest in innovation. Although ‘innovation proposals’ may be requested, Family Life generally finds these are targeted at low-level change and rarely focused on a major system disrupter. The measurement approach of projecting from current evidence to a likely impact on disrupting problem pathways requires ‘dream large’ thinking and funding.
Family Life is interested in preventing the need for child protection and achieving stability for children in a nurturing family. We argue we have the evidence from research and practice for mitigating and managing risks, to support a greater investment in vulnerable and challenging family situations embedded within a supported community context. This is our whole-of-community approach to enabling long term sustainable change by integrating therapeutic family support within a community engagement strategy. This includes our innovations like Creating Capable Communities, Community Bubs, and PeopleWorx social enterprise.
With 10 years evidence of results, this place-based model is ready for scaling in other communities. It needs an integrated big vision for social and systems change. Impact investing brings a business approach to innovation and social change, together with inter-sector engagement and a joined up agenda for financial and social outcomes. A more dynamic investment engagement, rather than the program by program transactional paradigm, is essential if our national innovation agenda is to include social innovation and creatively disrupting high cost, problem management systems, infrastructure and agendas.
What advice would you give to other small to medium sized community organisations interested in exploring impact investing?
Read eclectically, use Twitter to engage with the international community and to share as well as gain knowledge, tools and models. Engage your Board in this learning.
Be comfortable working with uncertainty, with diverse partners and disciplines, and adapt and change as we learn our way forward to do things differently and solve the root causes of social problems.
Dream large and engage with the business community requesting pro-bono advice. In our experience, our requests for help are well received and invaluable.
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